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I was just spoke to a representative at a major lead aggregator whom many of you work with that will be left unnamed (we spoke off the record) and he mentioned that they are significantly slashing their payouts for affiliates that generate leads for them. Coincidentally, I just saw this article at Leadcritic.com and it appears Lowermybills.com has also significantly slashed its payouts from $20 per leads to $6 (70% cut) and lendingtree.com has followed suit as well, although I don’t have figures.

One explanation being offered is that the current Fed Funds cut / rate decreases have sparked intense interest in the public and mortgage inquiries are up so much that companies are simply ordering less leads as they supplement their purchased leads with naturally occurring inquiries regarding lower rates. The idea being that this is necessitating a reduction in payouts by lead aggregators due to reduced revenue from mortgage companies. I’m not sure I buy this as a complete explanation as this reduction in demand for mortgage leads by mortgage companies is nothing more than a short term event, as long as there continue to be mortgages and mortgage companies needing to originate mortgages. I think there is probably an underlying issue of decreased revenues in play as well and this can also be affected by lead aggregators long term media buys and contracts that they are locked into and have to honor.

What does this mean to you? It means that now is the time to renegotiate with your lead providers, you may have significantly more leverage than you did even a month or two ago.

Author: Trace Richardson provides No Cost Refinance loans and build mortgage lead generation websites.

Fresh off the heels of HR3915, the Bill that at one time threatened to do away with YSP and is currently awaiting Senate review, comes the next round of legislation. California Assemblyman Ted Lieu is expected to introduce AB1830 shortly, a bill which is set to target California and more specifically, stated loans, option arms, sub-prime and non-traditional mortgages, and yes, once again, YSP.

We’ve always been trendsetters in California, so if this bill passes in its present form and your state files suit, rendering the general public virtually unable to obtain credit and with substantilly higher costs involved, thank us. I’m still waiting for legislation regarding the silent killers, knives and diving boards. I’ve heard that half a million people a year end up in the ER after cutting themselves while holding a bagel and cutting it at the same time. I learned firsthand, in college working as a cook, the dangers of cutting a bagel while holding it.

According to HousingWire.com (they broke the story when they received an anonymous copy of the bill): In addition to outlawing option ARM mortgages altogether, the bill would essentially eliminate stated-income lending for high-cost, subprime and non-traditional mortgages - the bill’s language says stated income applications must be “verified,” which really means they aren’t stated at all. The bill would also outlaw YSP as a method of compensation for high-cost, subprime and non-traditional mortgages.

The use of YSP in all other mortgages (including, ostensibly, prime originations) would be limited by establishing a rate ceiling of 200 basis points above par, and only permitting the use of YSP whenever it is the broker’s sole form of compensation on a loan.

AB1830 promises to be yet another misguided overreaction by politicians with a limited understanding of the problems at hand. In addition to simply being bad legislation, AB1830 shows the inability politicians to understand the negative consequences such legislation poses for the public at large. There is a fine line between protecting the public and taking away useful financing tools such as YSP and various “high risk” products that can be extremely useful tools for the wealthiest and poorest borrowers, even if there is a potential for abuse as there is with many useful tools, in and out of the kitchen.

Author: Trace Richardson can help with your No Closing Cost Refinance loans and helps loan officers achieve better mortgage lead conversion.

Roost.com is the newest entry into real estate search. While Zillow tries to list all properties and Trulia takes in feeds from individual real estate brokers, Roost gets its data by tapping MLS, as does Redfin. Roost also offers paid advertising in the form of a backend hosted directory of real estate sites that can gain natural and paid traffic. This is interesting because in order to comply with MLS rules, advertisers that are paying for placement / clicks cannot send traffic to their own corporate websites, so instead the traffic is sent to a branded directory page built specifically for each advertiser on the Roost.com domain.

From Roost MLS Guidelines: The Roost search engine is composed of a network of broker & agent IDX sites. All MLS searches on Roost provide consumers access to MLS listings on a broker’s IDX site under the compliance guidelines of that local market. The broker has control of their branding, URL and amount of presence.

According to TechCrunch: “We are laser focused on search,” CEO Alex Chang tells me. “We are not doing valuations. We are not creating heat maps. We are doing high-performance search.”

Roost is entering the market at an interesting time and it will be interesting to see what happens in this space as more companies enter with different data sourcing.

Source: TechCrunch

Author: Trace Richardson is the CEO of LeadPress.com, a Mortgage Webite Design that helps loan officers with mortgage marketing.

You’re the proud, you’re the few. You are a lock star. You lock 10 loans, you fund 10 loans. You only lock at the perfect times and only when the deal is 100% certain to close, yet never miss a desired rate due to market changes. You are a master of managing your clients and your pipeline. If this sounds like you, then this article isn’t for you, go find a mirror, I think your eyeliner is running, your hair is going flat and you know how your wife hates that. You are a lock star.

So if you aren’t funding 100% of your locked loans, what percentage are you funding? What should your goals be? Investors and banks have been lax in the past about lock to fund ratios but are now enforcing their set lock to fund ratios like never before. Flagstar is deactivating online logins of loan officers that don’t fund 2 out of 3 locks. They have told us that their pricing is based on an expectation of lock to fund ratio of 80%. If your lock fallout rates are high, you may strain your investor relationships or lose them altogether. This is a very real issue.

I say a good, challenging goal is that 75% of your locked loans should fund. You may say this should be higher or lower, but I think it is a realistic general goal. The key question is what are best practices to insuring the highest lock to fund ratio possible? The following examples are guidelines that will help

Simple and Sweet General Locking Guidelines:

1. The single most important guideline: Do not lock until you have a signed package / application in hand. This provides motivation for the borrower to follow through in getting the application back as soon as possible. I let them know that rates do change and that is all the more reason to get the application in as soon as possible. In fact, I can fax or email it to you right now and get you locked in today as soon as you fax it back to me, it’s that simple. This may be standard operating procedure for you already, but not for all, especially newer lo’s.
2. Do not lock until you have an approval. This may not always be necessary, but if the loan is questionable, it is a good idea.
3. Learn how to track the 10 year treasuries, the markets in general and their relationships to mortgage rates. I used to trade equities, so this is easier said than done. Many times I’m not locking even when I have a full package; it depends on what is going on in the markets.

In flat markets I may relax these rules a bit and I may make exceptions for trust worthy or past clients, but generally speaking I also use getting my application in first as a way to call out borrowers who are unwilling to admit that they are not committed to the loan although they claim they want it. It is very simple, if you want this loan than you are willing to own your share of the responsibility and get the package in as soon as possible. I always try to put myself in other people’s positions and if there is a loan or product I want that is time sensitive, I’m getting my application or whatever is necessary in as soon as possible to avoid market changes, enough said.

Alright, I can hear some of you saying that you will lose business if you follow these guidelines. Then you have to make a judgment call on a borrower to borrower basis. If you lock for all borrowers before you have an app in, you will fail and the suits will hunt you down and rip your logon out of your bleeding hands. So, it’s your call, but one thing is for sure, if you don’t successfully manage your lock to fund ratio, your manager or boss will. Investors are going to continue increased enforcement and very few can afford to lose their top investors for bad lock to fund ratios.

I know you have more ideas, post them in the comments section and don’t forget to LOCK ON!

Author: Trace Richardson is the CEO of Ipagio.com, a Mortgage Website Design firm and provides No Closing Cost Home Loans at TraceCapital.com.