THIS MORNINGS QUICK LOOK

1.  TOUR DE MTG FINANCE – Big MBS Day
2.  PRODUCT HIGHLIGHT – Financing Vs Sales Concession
3.  MARKETING – Remember What You Day

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MBS UPDATE

Today is the day that the Lord hath made or should I say today is the day that the FED will make.

PPI (Producer Price Index) came in yesterday .1% less than expectations and gave us a bit of relief or at least market rest to not lose more than we could have. We ended down 22 bps on the day.

Stay tuned at 1:00 EST today for the FED meeting and then Chair Powell speaks at 1:30 with the rate hike this month and what the concept is for future rate hikes this year.

We also have Import Price Index coming out first thing in the morning which can help set the tone for FED inflation decisions. This index reports the cost of imports coming in to the US vs the cost of exports going out. 

If it is costing more on imports  that is bad for the dollar and bad for inflation. Although, this is not a huge market mover in todays markets it can cause some volatility. 

Be watching or listening this afternoon.

If your not on my text alerts you can find out what happened tomorrow morning. If you are then talk to you soon.

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

FINANCING CONCESSIONS VS SALES CONCESSIONS

These two terms seem the same and are very similar but they can offer clarity when helping your clients negotiate a contract.

A financing concession is when an Interested Party to the transaction gives physical funds or credits towards the closing costs and/or pre-paids of a loan.
A Sales Concession is when an Interested Party gives something of value to the borrower but does not affect the actual financial side of the transaction.

For example. A seller gives a buyer $5,000 towards closing costs. This is a financing concession.
A borrower gives a grill and patio set at no charge to the buyer. This is a sales concession.
Any financing concession in excess of allowable Interested Party Contributions are classified as a sales concession.
Any sales concessions in excess of $500 in actual value must be deducted from the purchase price to obtain accurate loan amount.


Scenario:

• 100K Purchase Price, 95% LTV, Primary Residence with $4,000 seller paid closing costs.
• Max allowable contributions for above is 3%.
• You would have 3k in financing concessions due to max allowed and 1K in sales concessions.
• In this case since it exceeds max allowable you deduct the excess sales concession from the purchase price.
• The purch price would go from 100k – 99k and we would do 95% LTV of 99K.
• You do not need to amend the contract. This is just for underwriting purposes.
• Above applies to any value such as grills, patios etc in excess of $500 regardless of what the contract says.
• Excess sales concessions are determined by value of property via google, craigslist or other similar sites where used items are sold.

Here are the maximum Interested Party Contributions for Conventional Loans.

<=75 is 9%.

2% for investment properties.

>90% LTV OR CLTV is 3%.

76% – 90% LTV OR CLTV is 6%.

Marketing Ideas And Opportunites Little Things That Can Make A Big Impact

REMEMBER WHAT YOU DO

Inspired by Noah Fleming the picture on the left is one of the most technologically advanced vehicles in the world the 2022 Tesla S.

On the right is the 1974 jeep wrangler which is one of the least technologically advanced vehicles in the world.

Do you know what both of them have in common?

The main purpose of both of these vehicles is to get from point A to point B. Their purpose is transportation at the core. 

What I want to do today is to remind you of what your purpose is in what you do for a living. 

If you are an originator your main purpose is to close mortgage loans for clients. It does not matter what else you do, if you do not do that you will go out of business.

If your are a processor your purpose is to close mortgage loans. If you are an owner your purpose is to close mortgage loans. If you are a compliance officer your purpose is to close mortgage loans. If we fail at closing mortgage loans the business ceases to exist the same as if a car does not move from point A to point B it has no purpose.

Look at what you do today, yesterday, tomorrow and next week and ask yourself am what I am doing at this moment moving towards mortgage loans closing.

It is ok to have every system, process, flow of efficiency with the greatest software and systems known to mankind but if it does not help you close more loans you have forgotten the purpose of what you do.

That is why a person who answers the phone and fills out an application with the borrower over the phone will have the same success and likely more than the Rocket Mortgage LO who says click my link.

The person with the paper and the phone for $2.50 can compete with the LO who has 10’s of millions plus per year technology budget.

Remember your purpose, get back to the basics and just make sure the actions you are taking today are moving you as an LO, Processor, Owner, Manager, Compliance Officer or whatever you do is leading to closing mortgage loans.

Turn Times As Of This Morning Lookin Good!