I have a dream - The Letter X
Jan 18, 2021 7:48 pm
THE LETTER X
MONDAY IS FOR WINNERS
ISSUE #36
Today we celebrate as a nation, Dr. Martin Luther King Jr’s legacy. - Just like with most historical figures of Dr. King’s stature, we can take many lessons from how they lived.
In today’s world, the one lesson I am taking away is the importance of dialogue. Nobody really talks anymore and instead goes right to the extremes. What unites us far outweighs what divides us and I hope one day soon we will remember that.
Say Yes Every Day
Laura Brandao - President of AFR Wholesale
Say YES to being ok with asking for help! Some think that asking for assistance is a weakness but it is actually a strength. It takes great confidence in knowing who to go to and when to get help.
Mortgage Rate X
MBS X
Diana Bajramovic of MBS Highway
Jobs
Initial Jobless Claims, which measures the number of people filing for unemployment for the first time, were expected to come in at around 784,000 last week, but it increased by 181,000 to 965,000. To put this into perspective, pre-COVID-19, Initial Jobless Claims was averaging about 200,000 per week. Continuing Claims, which measures the number of people that continue to receive unemployment benefits, also came in at a disappointing level at up 200,000 to 5.3 million. Pandemic Unemployment Assistance Claims, which gives unemployment benefits to those that normally wouldn’t qualify, dropped by 941,000 to 7.4 million and Pandemic Emergency Claims, which extends claims by 13 weeks after regular benefits expire, decreased by 325,000. Even though it looks like both these numbers improved, we have to remember that these claims expire and that is a big reason for the drop. Overall, we are seeing extremely high levels of claims.
401(k)
We got some news that households are tapping into their 401(k)s to make it through the pandemic. 31% of households withdrew money from their 401(k) and 80% of these households withdrew $25,000. A third of these households took out over $75,000. The median income of these individuals is around $119,000, so these people may not be receiving stimulus benefits. We can assume that some of these people are employed, so tapping into their 401(k)s may not be the best idea. As an Advisor, you should be reaching out to your clients to conduct an annual review to tap into the equity in their home to pay off debt. Use the Debt Consolidation tool on MBS Highway to take advantage of this opportunity and help your clients and their families.
Check out this recent HousingWire Podcast where Barry Habib was featured to talk about the 2021 Housing Market.
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Just for the Xperts!
8 Things You Probably Didn’t Know about MLK
- King’s birth name was Michael, not Martin.
- King entered college at age 15.
- King received his doctorate in systematic theology.
- King’s famous I Have a Dream speech was not his first at the Lincoln Memorial.
- King was imprisoned nearly 30 times.
- King narrowly escaped an assassination attempt a decade before his death.
- King’s last public speech foretold his death.
- George Washington is the only other American to have had his birthday observed as a national holiday.
In case you missed it, Marcia Davies presents “From Farm Girl to Leader: Lessons Taught and Lessons Learned” an Interview style presentation hosted by EPM’s Suha Zehl, CAO, and Leora Ruzin, SVP Wholesale Operations
A decline in the number of forborne loans in those portfolios serviced for banks and private label securities (PLS) accounted for most of the modest downturn in overall numbers last week.
It was easy to get lulled into complacency by the second half of 2020 when it came to mortgage rates. Even as other indicators said rates should be rising, they continued on a calm journey to multiple record lows. 2021 has been very different so far!
Jenna Ryan, a Realtor based in Frisco, Texas, was charged with disorderly conduct and “knowingly entering or remaining in any restricted building or grounds without lawful authority,” according to a criminal complaint filed in federal court on Friday. This coming on the hills of NAR stating actions by REALTORS during the capitol riots were against NAR's Code of Ethics.
One of the worst-kept secrets in the real estate world was publicly confirmed this week as the residential brokerage Compass submitted a draft registration statement with the U.S. Securities and Exchange Commission (SEC) for a potential initial public offering (IPO).
Fannie Mae and Freddie Mac will not exit federal conservatorship under the Trump Administration; the Federal Housing Finance Agency will leave that decision to the Biden Administration, FHFA said late yesterday.
Across Amazon, Disney+, Hulu and Netflix (but not HBO Max) the most streamed series was The Office at 57.1 billion minutes. A distant second was Grey’s Anatomy at 39.4, followed by Criminal Minds with 35.4. Ozark, the only original series among the top nine most popular was next with 30.4 billion. NCIS was fifth with 28.1 billion minutes. While original programming matters, older titles may matter more!
Prior to Covid-19, US retail vacancy rates were 4.5%. They are now 5.4% and are expected to end 2021 at 6.2%. As a result, retail rents, which had been rising by 2% per/year before the pandemic, are now expected to decline by 2% during 2021. This weak performance is largely due to the 12,200 retail store closures which will empty 159 million square feet or 1.4% of all retail space.
US employers shed 140,000 jobs in December. Though the first employment losses since April, this doesn’t suggest an economy heading into recession. These losses were entirely lockdown-based, with almost 500,000 losses in Leisure and Hospitality: the California lockdown probably cost 600,000 jobs. Elsewhere, job growth was surprisingly solid, and Congress’ pandemic aid relief will prevent a vicious cycle. However, Covid-19 is raging, making 21Q1 an economically fraught quarter.
The IMF says in 2020 global GDP shrank by a staggering 4.3% (a decline only previously experienced during the Depression and both World Wars), or -$3.6 trillion. Before Covid-19 hit, the IMF expected 2020 global GDP to grow by 2.5%, or $2.1 trillion. The difference between what was expected to happen in 2020 and what happened is $5.7 trillion, or 6.6% of global GDP, more than the GDP of Japan!
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The Vieaux
Brian Vieaux - President of FinLocker
Adapting Your Sales Strategy To Cast A Wider Net
When the loan faucet is flowing, it’s tempting to pick the most qualified loan applicants whose applications will be easier to process and quicker close. If you employ this strategy, you are not building your pipeline for times when the faucet slows to a trickle.
According to a 2020 LendingTree study, 6.15% of homebuyers nationwide had their home loan denied. However, racial disparity in denial rates for purchase and refinance loans can be more extreme on the county level, where the denial rate is disproportionately high for both Black and Hispanic homeowners and homebuyers.
The Consumer Financial Protection Bureau (CFPB) identified high DTI and credit as the top two reasons for mortgage purchase and refinance denials for both groups.
I raise these points as a prelude that I recently had the opportunity to be interviewed on the Fintech Hunting podcast with Kristin Messerli, founder of Cultural Outreach, which provides a resource for mortgage lenders to reach young and diverse borrowers.
In a recent Cultural Outreach report, 1 in 4 future buyers from these two market segments had absolutely no understanding of mortgages, and 40% said qualifying for a mortgage is one of their biggest fears related to home buying. So, they turn to online resources to learn about the home buying process, which can provide confusing and conflicting information.
Technology can provide a transparent way to improve borrower readiness across all market segments. If mortgage originators were to put high-tech and high-touch tools and education into the hands of prospective borrowers, those individuals would be empowered to improve their financial well-being and get mortgage ready at their own pace. After closing, they could continue to learn how to manage their finances to plan for homeownership costs and be better positioned to refinance or purchase another property later.
Click here if you’d like to listen to the podcast.
How much easier would it be to give every prospective borrower that wasn’t mortgage-ready a personal financial assistant that provided a transparent path to mortgage readiness. The future homebuyer could connect their banking, credit card, and loan accounts to the app and learn to budget and save for their down payment and closing costs while reducing their DTI. They could enroll in credit and learn about the factors that influence their credit score so they can take steps to improve their score. While improving their financial health, they could watch videos and read articles to improve their financial IQ. All this would be happening while you were closing home loans for mortgage-ready homebuyers. What’s more, you’d be building your long-term pipeline because your white-labeled app helped to create a personal relationship with each borrower and many homebuyers make purchasing decisions based on trust and referrals.
If you would like to provide your borrowers with that personal financial assistant, click here.
Lending, Leadership and Life Quotes
Eddy Perez – President & CEO of EPM
Industry Professional to Watch!
Ashley Miller, Director of Business Development at GTG Financial
Make sure you tell Ashley you saw her in The Letter X!
Beyond The Numbers
Fobby Naghmi, EVP, National Sales Mgr. of First Option Mortgage
I’d like to share a thought with you ’ve that I’ve had for many years now; how did we create the parts we needed for the mobile telephone? For plasma tv’s? For electric cars? For that matter, the frikkin Furby??? I mean did someone cut a deal with some extraterrestrial beings that said, “from now on, when and if, the people on earth have an idea that will advance their human race, we will provide such material as per plans”. Not really seeing that happening. Most likely everything that is required to building any new technology has already been right here on our planet. All that has ever been needed was someone to have an idea to make something that would improve our lives and this new invention would require “X” to do it!
Similar to human beings. Whatever we need is already within us. It is simply a matter of tapping into that part of us that holds that missing piece we think something, or someone will give to us. Never knowing that it’s been in us the entire time. All we need is a reason strong enough to push us to start searching within, and from that point, there are no limits!
Mortgage X Marketing Manifesto
Where's Your Call-to-Action (CTA)?
I'm often asked the question:
"What's the most common mistake you see LOs making with their marketing?"
Over the years, that answer has not changed.
Whether it's just weak, or missing entirely, the call-to-action is where I see many
would-be marketers blowing it.
They'll tell you to, "visit us online" or "apply now" -- or just give out a phone number
and tell you to call them.
None of these are very effective in eliciting a response from consumers.
When it comes to calls-to-action, I think of the one and only Brian Tracy and his
sales training on everyone's favorite radio station, "Wii FM," as in:
"What's in it for me?"
That's the question your consumers are wondering whenever they hear an offer
or an ad, and if you can create a compelling CTA based on answering that question,
you'll get better results from any and all marketing.
Thanks, and I'll catch you on next week's The Letter X!
I hope you enjoyed TLX #36! Now go crush this week!
