The time has arrived Professional Mortgage Group, Inc. and in particular Eric Hemmer & Shawn Von Talge have been recognized by the National Association of Mortgage Brokers (NAMB) as professionals with a higher level of education and integrity. You can visit their website to see who has earned this seal in the Columbia, Missouri area.
This seal certifies that we have completed at least six hours of continuing education with two of those hours in ethics training, we abide by a higher and strict code set by the NAMB, we have received recommendation letters from our peers and business partners, and we have passed the necessary test to achieve this honor. I have been an outspoken advocate for continuing education and testing for mortgage brokers for a very long time and I applaud the NAMB for taking the necessary steps to try and curb the unethical practices that have been highlighted in our industry the past couple of years. Hopefully the heightened awareness and competitive advantage that comes with having this seal will promote its use by more mortgage professionals.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Wednesday, August 13, 2008
Tuesday, August 12, 2008
FED Survey Says....Credit Is Tougher To Get.
The Federal Reserve reported the credit squeeze only got worse during the past 3 months and that most banks plan to stay very conservative for at least another year!
So even after all of the massive cutbacks and changes that our industry as undergone over the past 2 years, either more changes seem to be on the way or at the very least we will continue with the current environment. This doesn't really come as a surprise, but nevertheless these are the results the survey produced.
58% of Banks tightened lending standards for commercial and industrial loans to large and medium firms. 65% tightened lending standards for small firms.
81% of Banks tightened standards on commercial real estate, while 50% of banks said demand for these products was weakening.
74% of banks said they tightened lending standards for prime mortgages. At the same time 53% said they saw reduced demand.
86% of banks tightened lending standards for subprime mortgages. The total number of banks who offer such loans declined to 14% of all banks from 30% two years ago.
84% tightened lending standards on non traditional mortgages while 63% reported reduced demand in these products.
36% of banks were less willing to extend credit in the form of consumer installment loans.
Only 2% were more willing.
80% tightened lending standards on home-equity lines of credit.
67% tightened lending standards on credit cards. This was done mostly by refusing new loans to consumers without good credit.
When they refer to tighter lending standards they are refrring to the following:
Higher credit score requirements, more documentation is required, more collateral is required, and higher interest rate spreads are offered. It is also becoming more common for banks to ask for co-signers.
So from these results we can see that the credit crunch is still very much upon us. Tighter credit standards will hurt the economy and slow spending. There are less avenues for people to consolidate debt and they will lean more heavily on credit cards. I really think it is only a matter of time before these credit cards companies get pinched hard. It just makes sense for this to happen. Just look at one piece of the puzzle that makes up credit card consumers, the foreclosure market. All of these people who are foreclosing on their homes no doubt have credit cards. They probably have been relying on them heavily in the recent months trying to make thing work. When they finally run out of options and are forced to walk from their homes they surely leave credit card companies hanging too. Bankruptcy is the common alternative at this point for most people. If this pinch takes place I just hope it isn't as severe as the mortgage meltdown! That would be a mess!
While this information isn't very positive, I thought the survey results were very interesting to see and wanted to pass it along.
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
So even after all of the massive cutbacks and changes that our industry as undergone over the past 2 years, either more changes seem to be on the way or at the very least we will continue with the current environment. This doesn't really come as a surprise, but nevertheless these are the results the survey produced.
58% of Banks tightened lending standards for commercial and industrial loans to large and medium firms. 65% tightened lending standards for small firms.
81% of Banks tightened standards on commercial real estate, while 50% of banks said demand for these products was weakening.
74% of banks said they tightened lending standards for prime mortgages. At the same time 53% said they saw reduced demand.
86% of banks tightened lending standards for subprime mortgages. The total number of banks who offer such loans declined to 14% of all banks from 30% two years ago.
84% tightened lending standards on non traditional mortgages while 63% reported reduced demand in these products.
36% of banks were less willing to extend credit in the form of consumer installment loans.
Only 2% were more willing.
80% tightened lending standards on home-equity lines of credit.
67% tightened lending standards on credit cards. This was done mostly by refusing new loans to consumers without good credit.
When they refer to tighter lending standards they are refrring to the following:
Higher credit score requirements, more documentation is required, more collateral is required, and higher interest rate spreads are offered. It is also becoming more common for banks to ask for co-signers.
So from these results we can see that the credit crunch is still very much upon us. Tighter credit standards will hurt the economy and slow spending. There are less avenues for people to consolidate debt and they will lean more heavily on credit cards. I really think it is only a matter of time before these credit cards companies get pinched hard. It just makes sense for this to happen. Just look at one piece of the puzzle that makes up credit card consumers, the foreclosure market. All of these people who are foreclosing on their homes no doubt have credit cards. They probably have been relying on them heavily in the recent months trying to make thing work. When they finally run out of options and are forced to walk from their homes they surely leave credit card companies hanging too. Bankruptcy is the common alternative at this point for most people. If this pinch takes place I just hope it isn't as severe as the mortgage meltdown! That would be a mess!
While this information isn't very positive, I thought the survey results were very interesting to see and wanted to pass it along.
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Monday, August 11, 2008
Climbing the Ladder
Now more than ever our industry needs true professionals to take the bull by the horns and step up and make a name for themselves. So in light of this I wanted to share with our readers some of the highlights and educational designations I have achieved over the past couple of months.
1) Lending Integrity Seal of Approval: I recently completed the requirements for this designation and hopefully any day now will be recognized by the NAMB (National Association of Mortgage Brokers) as an individual with a higher ethics and educational standard.
2) Nominated for the MAMB (Missouri Association of Mortgage Brokers) Board of Directors: Ken Louks the former President of MAMB has nominated myself as a future board member. I am greatly looking forward to getting involved in the governmental affair issues facing Missouri mortgage brokers and will do my best to represent us well.
3) Started preparing for my CMC (Certified Mortgage Consultant) designation: I am in the very early stages of the paperwork associated with this but am very much excited about furthering my educational background.
4) Mortgage News Daily Blog Contributor: Some of you may have actually used this free service and I must say the gentlemen behind the insight (whom I will not name) is extremely knowledgeable on the mortgage rate environment. At times I help lend some perspective on what I see in the mortgage rate market and my opinion on the avenues affecting them.
5) Scotsman Guide Author To Be: I recently wrote an article that will be published, hopefully sometime in October by the Scotsman Guide. I will give you further details as they become available but as of last Friday I did sign my Authors Contract for this publication.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
1) Lending Integrity Seal of Approval: I recently completed the requirements for this designation and hopefully any day now will be recognized by the NAMB (National Association of Mortgage Brokers) as an individual with a higher ethics and educational standard.
2) Nominated for the MAMB (Missouri Association of Mortgage Brokers) Board of Directors: Ken Louks the former President of MAMB has nominated myself as a future board member. I am greatly looking forward to getting involved in the governmental affair issues facing Missouri mortgage brokers and will do my best to represent us well.
3) Started preparing for my CMC (Certified Mortgage Consultant) designation: I am in the very early stages of the paperwork associated with this but am very much excited about furthering my educational background.
4) Mortgage News Daily Blog Contributor: Some of you may have actually used this free service and I must say the gentlemen behind the insight (whom I will not name) is extremely knowledgeable on the mortgage rate environment. At times I help lend some perspective on what I see in the mortgage rate market and my opinion on the avenues affecting them.
5) Scotsman Guide Author To Be: I recently wrote an article that will be published, hopefully sometime in October by the Scotsman Guide. I will give you further details as they become available but as of last Friday I did sign my Authors Contract for this publication.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Thursday, August 7, 2008
Exciting Time For Columbia On The Horizon!
I know, I know this title probably made you say "Yeah Right" if you are in the Real Estate/Mortgage Industry. However, it is an exciting time on some fronts. Which ones?
Well summer is winding down and I would imagine most people are putting the finishing touches on their summer plans or vacations. I know I just got back from a quick trip that was long overdue! It is always refreshing to take a break! Another exciting topic is the fact that the highly ranked Missouri Tiger Football teams season is nearing! There is a lot of buzz floating around about this season and everyone seems to have high expectations. It should be awesome! The upcoming school year is also right around the corner. With the expected increase in the incoming class, the rental market in Columbia should be booming. With Football home games and the students back, more money will be pumped in the community! We all know that the local economy will benefit from this! Anytime this happens there should naturally be a ripple effect that will benefit most people in a positive way. I hope our industry will benefit a little bit from this!
We wish everyone a prosperous coming months in the real estate world and hopefully we will have the pleasure of working with you. If not, hopefully we will see you at some home football games rooting on the Tigers! It should be fun!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Well summer is winding down and I would imagine most people are putting the finishing touches on their summer plans or vacations. I know I just got back from a quick trip that was long overdue! It is always refreshing to take a break! Another exciting topic is the fact that the highly ranked Missouri Tiger Football teams season is nearing! There is a lot of buzz floating around about this season and everyone seems to have high expectations. It should be awesome! The upcoming school year is also right around the corner. With the expected increase in the incoming class, the rental market in Columbia should be booming. With Football home games and the students back, more money will be pumped in the community! We all know that the local economy will benefit from this! Anytime this happens there should naturally be a ripple effect that will benefit most people in a positive way. I hope our industry will benefit a little bit from this!
We wish everyone a prosperous coming months in the real estate world and hopefully we will have the pleasure of working with you. If not, hopefully we will see you at some home football games rooting on the Tigers! It should be fun!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Wednesday, August 6, 2008
The Freddie Mac Bomb!
Well it shouldn't have come as a surprise but Freddie Mac the world's 2nd largest buyer of mortgages lost $821M in the second quarter 08 compared to a profit of $729M a year ago. The news shocked Wall Street as most analysts were only figuring a loss of .38 cents a share but in reality received $1.63 a share. Hence, Freddie's stock has lost 20% already this morning. The reality of this financial news will hit the real estate community hard as Freddie's results have shaken investors confidence and as a result MBS (Mortgage Backed Securities) have sold off big time and are currently down 45 basis points. What does this mean? Higher rates will be a certainty this morning.
Fannie Mae the world's largest buyer of mortgages will release their second quarter results on Friday so we could be in for more bad news. Not that this comes as a big surprise but I think investors are looking for the bottom in this mess in order to instill confidence in their (Fannie & Freddie) financials. Certainly the moves made by the government toward the end of last month gave some creditability to the government sponsored agencies but the fact remains that the companies poor performance, concern over capital requirements, the ability to raise capital and the struggling sector for which they must profit on have really hit these companies in a big way. The bottom line when deciding to invest dollars in a company is it's ability to make money and right now there are big concerns whether or not this is possible in the near term future.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Fannie Mae the world's largest buyer of mortgages will release their second quarter results on Friday so we could be in for more bad news. Not that this comes as a big surprise but I think investors are looking for the bottom in this mess in order to instill confidence in their (Fannie & Freddie) financials. Certainly the moves made by the government toward the end of last month gave some creditability to the government sponsored agencies but the fact remains that the companies poor performance, concern over capital requirements, the ability to raise capital and the struggling sector for which they must profit on have really hit these companies in a big way. The bottom line when deciding to invest dollars in a company is it's ability to make money and right now there are big concerns whether or not this is possible in the near term future.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Tuesday, August 5, 2008
Does Your Broker Fight for You!
In today's volatile market changes are coming in bunches. It comes as no shocker that programs are being cut and underwriting guidelines are tightening! With this comes a very important point I would like to focus on. Does your broker or loan officer fight for you and your loan. I am not talking about trying to quote you a low rate to get the deal. This is after you have done your comparison shopping and picked your lender. If you don't know the answer to this, you should do your homework to find out if the lender you are working with has the experience and work ethic to get the job done.
Number 1, the broker should discuss with you ahead of time what potential issues your loan will have. By doing this, you know exactly what to expect and this is critical. Why is it critical? With today's super tight underwriting guidelines your broker can run into several road blocks throughout the loan process. If your broker doesn't know how to deal with these situations, your loan could be turned down for a silly reason! Believe me it happens. I would like to think an underwriter knows their stuff, but this isn't always the case. I have run into several underwriters that give you an answer or decision and they are just winging it rather than doing their homework or asking a supervisor. You are not doing your job as a broker if you aren't keeping them honest! Just this week we encountered 2 cases where we fought for our borrower and got an issue resolved after the underwriter had declined the loan. They see so many files and they are not in tune with the file like we are. You simply cannot just give up and go with whatever the underwriter says. If it makes sense that the file gets turned down, then fine. Not to make light of the foreclosure problem, but it is obvious that many loans over the past few years should have been turned down! However, if it doesn't make sense you better believe we will fight it! Underwriters are not taught to think outside the box and frankly this isn't their job. As a broker you have to point out the obvious and many times this is all it takes. At PMG we have been handed many files that failed at other lenders. On numerous cases we have been able to close the loans after working hard to fight through a few bumps in the road. An experienced broker should be able to do this for you!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Number 1, the broker should discuss with you ahead of time what potential issues your loan will have. By doing this, you know exactly what to expect and this is critical. Why is it critical? With today's super tight underwriting guidelines your broker can run into several road blocks throughout the loan process. If your broker doesn't know how to deal with these situations, your loan could be turned down for a silly reason! Believe me it happens. I would like to think an underwriter knows their stuff, but this isn't always the case. I have run into several underwriters that give you an answer or decision and they are just winging it rather than doing their homework or asking a supervisor. You are not doing your job as a broker if you aren't keeping them honest! Just this week we encountered 2 cases where we fought for our borrower and got an issue resolved after the underwriter had declined the loan. They see so many files and they are not in tune with the file like we are. You simply cannot just give up and go with whatever the underwriter says. If it makes sense that the file gets turned down, then fine. Not to make light of the foreclosure problem, but it is obvious that many loans over the past few years should have been turned down! However, if it doesn't make sense you better believe we will fight it! Underwriters are not taught to think outside the box and frankly this isn't their job. As a broker you have to point out the obvious and many times this is all it takes. At PMG we have been handed many files that failed at other lenders. On numerous cases we have been able to close the loans after working hard to fight through a few bumps in the road. An experienced broker should be able to do this for you!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Monday, August 4, 2008
Revised Bill Concerning FHA Down Payment Assistance
Hopefully by now, especially given our latest blog post you understand the impact of H.R. 3221. A bill signed into law by President Bush last week revamping the mortgage industry and more significantly Fannie, Freddie and the FHA lending program. One of the key components of the FHA legislation was the removal of DPA (Down Payment Assistance) from the program. Basically this was a fairly unique program in which the sellers actually made the down payment for the buyers typically built into the sales contract and resulting in an inflated sales price. This was fine as long as the home appraised for the necessary value and has operated pretty well given today's environment.
In my opinion the removal of the program was far more significant than what many people think. Not only do the buyers have to come up with the money out of their own pocket but instead of 3% it is now 3.5%. In a market already starving for buyers this action simply adds fuel to the fire in the ever growing struggle of some normalcy in the housing market. The NAMB (National Association of Mortgage Brokers) and now a couple of U.S. Representatives agree that this change is a mistake. On Thursday July 31st H.R. 6694 was introduced by Al Green (D-TX), Maxine Waters (D-CA), Gary Miller (R-CA) and Christopher Shays (R-CT). This bill aims to reverse or revise the requirements for the seller-financed down payment assistance. NAMB will work in conjunction with Congress to reinstate this vital program that has helped so many Americans achieve the dream of home ownership. Only time will tell whether or not this battle can be won as FHA has experienced significant losses as a result of this particular program.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
In my opinion the removal of the program was far more significant than what many people think. Not only do the buyers have to come up with the money out of their own pocket but instead of 3% it is now 3.5%. In a market already starving for buyers this action simply adds fuel to the fire in the ever growing struggle of some normalcy in the housing market. The NAMB (National Association of Mortgage Brokers) and now a couple of U.S. Representatives agree that this change is a mistake. On Thursday July 31st H.R. 6694 was introduced by Al Green (D-TX), Maxine Waters (D-CA), Gary Miller (R-CA) and Christopher Shays (R-CT). This bill aims to reverse or revise the requirements for the seller-financed down payment assistance. NAMB will work in conjunction with Congress to reinstate this vital program that has helped so many Americans achieve the dream of home ownership. Only time will tell whether or not this battle can be won as FHA has experienced significant losses as a result of this particular program.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
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