THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – Fed Speaks – Auctions Galore
- PRODUCT HIGHLIGHT – Win Deals With Loan Size Grids
- JACKISM OF THE DAY- Raise Your Flag
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Tour De Mortgage Finance Learn Something New Everyday About Your Industry
FED SPEAKS – AUCTIONS GALORE
As you talk to clients and referral partners today and they ask what is happening in the markets today you can let them know economic reports are not in abundance this week but the Treasury selling bonds to fund debt and Fed speakers are plentiful.
Today we have a 48 Billion dollar 3 Yr Note auction at 1 PM Central, 40 Billion in 10 Yr Notes on Wednesday and 24 Billion in 30 Yr bonds on Thursday.
This means there is going to be more supply in the markets which can impact demand and can impact the markets. If we see strong demand that will be good for the markets and if low demand it can cause the markets to require higher margins which could impact rates to the negative.
In addition, today we have five Fed speakers starting at 9:15 AM Central and throughout the day. Four Fed speakers tomorrow, three Fed speakers on Thursday along with the jobless claims report which is important. Then two speakers on Friday.
This means the news market vs the financial reports market will be making a lot of the volatility this week and of course bond demand.
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
WIN DEALS WITH LOAN SIZE GRIDS
My buddy Eddie brought this to my attention last week and what a great thing to share with you to gain an advantage over your competition.
The convenience of pricing engines has made life much easier when it comes to getting a quick quote for a client. It has also made us blind to knowing what goes in to making the rate that you are offering.
If you were to look at the actual adjustments and then if you are close to a tier change that could make a difference and tweek what you are presenting to your borrower it is possible you may win more deals.
Lets take the loan amount tiers and see how this works. LTV is an obvious one we should all be looking at but loan size is often overlooked.
The other assumption is that lenders are paying up more for higher loan amounts. Some lenders are but the agencies are not. The agencies set the flow of these tiers and right now they need lower loan sizes. Lower loan sizes bring better pricing.
The reason is they are trying to fill their buckets with more LIP and VLIP mortgages aka CRA (Community Re-Investment Act) type loans.
LIP is Low-Income loans where borrower income is between 50% and 80% of Area Median Income.
VLIP is Very Low Income whose qualifying income is less than or equal to 50% of Area Median Income.
Each state has it’s own tier that is numbered 1 – 6. For my territory AL is tier 3 and GA and MS are tier 4 when looking at below grids.
The first pic below is purchase incentives. Check out loan sizes less than 125K. You will gain 50 BPS better pricing than a 201K+ loan. Not that you want that but if you are sitting at 201K and lower it by 1K you could get 25 BPS better pricing and so on.
The second pic below which you can click on to blow up shows pricing adjustments based on all loan types vs just purchases. There are 14 separate loan size tiers that varies by a total of 48 BPS.
That is almost 100 BPS difference in adjustments for loan size alone and the lower the loan size the better the pricing.
Challenge yourself today to actually look at all of the adjustments on the loans you price out and even pull up a rate sheet to see all adjustments that a specific loan type can have. You may be surprised in what you find.
Jackism of the Day Truths and Thoughts that make you go hmmm
RAISE YOUR FLAG
If you were to sit down with your family and design a flag what symbols would you put on it?
Whether you are single with no one at home, an empty nester where it is just you and your spouse or if you are a single parent or married with kids in your home. This applies to any situation.
We live in a very distracted world that often disconnects us from what we truly want to be and what we truly want to experience.
If you sat down at a table with everyone who lives in your home and said what does a great evening look like in your home? What brings joy to the family after doing these things. What brings frustration and distraction from having a joyful and happy evening at home?
An ideal evening that my wife and I would enjoy (empty nesters) is a phone and email free zone after 5:30 PM, cocktail and conversation on the porch, a few hands of a card or board game together, both of us sitting at the table and having dinner and conversation, watch a couple shows with the fireplace on and a nice cuddle in the evening and end with praying together.
What if we put symbols of a wonderful evening like this on a flag or on any form of symbol you can think of and when we raise that flag after work is over and we enter in to evening time then it is a reminder of what our family represents. It is not a checklist or requirement as that would be a burden. It is a reminder that when you are distracted with other things and other people that you acknowledged with the entire family what you represent and are to honor this sacred time you have together.
Obviously, the number one distraction is screens. Both you and those in your household. But we have many others.
The point here is for you to come together and say this is what brings this family joy and happiness. Not just mom or dad or kids. The family or the empty nester couple or just you.
When it is time, raise your flag and that means it is family time and it is a sacred time to come together and experience life together the way you always hoped you would.
