Where R Rates & Market Knowledge Information To Chat With & Share With Clients & Realtors

MARKET CHANGES

1 BPS = $10.00 change in cost to borrower for the same rate per 100K in loan size.
Take Coupon % & add .75%ish to know the area impacted on your rate sheets.

GREEN is GOOD for Rates – RED is BAD for Rates

THINGS TO SHARE WITH CLIENTS & REFERRAL PARTNERS

We got some green on the screen this morning folks. 

A nice boost this morning came from GDP results that the markets took favorably and I think the markets were looking for anything bond friendly. Another item was that we received a revised inflation number of .1% better than initially given.

Keep in mind that .1% equates to 1.2% annualized inflation on a year over year basis. The revised numbers come in after more data is received after the initial reading is put out. These two numbers are giving us some gains this morning.

The big number we are waiting for is coming out tomorrow when we receive the PCE (Personal Consumption Expenditures) for current inflation data. This will be a very big deal depending on how it comes in. This hits at 7:30 AM Central time so it will be before morning rate sheets if you are concerned about locking or floating in to the PCE number.

Yesterday’s demise in rates was another bad bond auction with the 7 year notes producing a C demand if you were to grade it. Not a good week for bond auctions.

Pending home sales came in month over month down 7.7% which is a really big hit compared to the expected 1.1%. In case you are curious how pending home sales are calculated. It is based on the number of purchase contracts that go under contract via the MLS system. So this means there are 7.7% less homes under contract month over month. This is after a 3.4% gain last month. The last time we went down like this was September of 2022. 

The good news is we got room to go up.

As far as stocks go just don’t look at your investment accounts : ) In the last 13 days we are down 1,971 points. Whew.

Hang in there folks and lets be thankful for the uptick in better rates for the moment.

Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition

USE P&L FOR INCOME ON FHA

Here is an FHA guideline that I am willing to bet 95% of folks out there did not know and likely many lenders possibly does not allow. I know I didn’t know until last week.

For self-employed borrowers on FHA it is a requirement that you must provide a P&L if a quarter has passed since the most recent fiscal tax year or calendar year. This means April 1st of each year we need a P&L and then July 1st and so on.

Then the guide goes on to say this. “If income used to qualify the borrower exceeds the two-year average of tax returns, an audited P&L or signed quarterly tax return must be obtained from the IRS”. 

Now hmmmm. What exactly does that mean? First, we being Flagstar sees that if you provide a regular P&L and it is lower than the two year average we are going to average that lower P&L in to the income. Just be aware of that when submitting a P&L and that makes perfect sense.

The very interesting part here is we also believe if they require us to lower that average income then we should likewise be able to INCREASE their income from the two year average.

For example, it is the end of May 2024. If you provide 2022 and 2023 tax returns and a P&L good through May 30th then we can average the 2024 income in to the two year average and we would divide by 29 months.

There is a big kicker to that rule though. It MUST BE an audited P&L OR a signed quarterly tax return from the IRS. Of course, it is a rare occasion someone does quarterly tax returns. Although, it is very possible to get an audited P&L from their CPA.

Yes, this will cost a little bit but this can also make or break a deal. We only need an audited P&L and I asked what we are looking for? I was told whatever the least version of an audited P&L completed by a CPA will be acceptable.

They cannot do it themselves and we would like it to be from a CPA. 

I hope this will help find a solution for a loan in your pipeline or one that may come your way with future clients.

Jackism of the Day Truths and Thoughts that make you go hmmm

WHAT’S YOUR PITCH?

When someone asks you the question. Why should I work with you? Do you have an answer for that question?

Last week our regional manager came back from the secondary conference in NYC. One of the highlights of the week was how many people they spoke with and met with and how fast those interactions were. She said those conferences for folks are a lot like speed dating. You have so many meetings, dinners, socials and other items and you meet a ton of people which are all great things.

After reflecting she said do you guys have an elevator pitch. Sure it is old school but it really is relevant in a lot of ways. What would you say if someone said why should I work with you?

I do not mean your company but I mean you. What makes you special. She challenged us to write an elevator pitch and to not be shy of why we are a benefit to others. What do we actually bring to the table.

I have never really wrote down my elevator pitch and I certainly do not enjoy role playing. I do think though it is very important to spend a few minutes and write one. Right now. I challenge you. Why is it such a great honor to work with YOU!

What would you really want to say vs what we usually say or what is politically correct to say. What I learned from doing this little exercise was not that I need this pitch in my pocket to remember who I am but to take pieces of what I write and do bring them up in conversations. I am not going to recite it word by word although I did use it this week.

I brought on a new client and I was sending out my welcome email to all of the folks at the company. I mentioned this little challenge and I told them if you want to know why you should do business with me? Well, this is why and I said I have never done this before but I am going to do it this time and I copied and pasted it.

This took me like 5 minutes to write and it comes from my heart. This is my elevator pitch if you were a prospect and asked me why you should do business with me.

Why should you work with me do you ask? That is an excellent question.
 
I would say you will enjoy working with me if you care more about your clients than you do your margins. That is how I feel about my clients. After 34 years in this business I have made my career, I have seen the top and the bottom of the leaderboard and have experienced dry spells and times of great prosperity. What I have learned about success is the more success you bring to others the more you see in return. I have your back when yours is up against the wall, I have the answer when you have a tough scenario, I have connections with the people that can get things done but most of all I am going to celebrate your wins and be here for you when times are tough. For me it is about the people. If you care about people then the profits will always come. If you know what you are doing and you care about what you are doing then come on board. If you want someone to always tell you what you want to hear, do everything for you and price match every deal then I am not the rep for you. When you are ready to run your business and make a difference give me a ring. Because honestly I really don’t the money, I just desire to work with people I care about and that want to make a difference in the world.

Today, I challenge you to write your elevator pitch and remind yourself of why people should want to do business with you. It does not matter how long the elevator ride is. Just know who you are and what makes you, you. Then let others know how they can be better by working with you.

PERKS TO GROW YOUR BUSINESS
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