🔥 2021 could be a rough year if...- The Letter X

Oct 24, 2020 2:31 pm



Presented by: EPM

..you are not purchase focused. As you will read in the News X section, MBA predicts a 50% or 800 billie cut in refi business in 2021.

For those that have not strayed from their purchase focus and kept in front of their referral partners, they are in for a pretty sweet 2021. For those that went for the low hanging fruit as a priority and let other MLOs cut in on their agent business, you might be in for more valleys and less peaks next year.

Another thing to think about is that with rates being as low as they were this year, the refi opportunities are likely to dry up for the foreseeable future and be a bit more specialized based on circumstance. This is why having a focus on purchase is always the smart long-term move for your origination business.

Make sure to listen in on this week’s podcast of the week where you here from a Loan Officer who is doing exactly that as he marches to 100 million in production as a solo act. Enjoy this week’s edition of TLX!

Say Yes Every Day 

Laura Brandao - President of AFR Wholesale

This week say yes to a Great morning routine!  Think about what you can do when you first wake up that will set the stage for a positive and productive day.  How you start the day will absolutely affect the results of the day.

Sharing is Caring! Remember to share your personal referral link

(bottom of email) for a chance to win a $50 Amazon Gift Card! 


Diana Bajramovic of MBS Highway

Housing Strength and Affordability

There seems to be some misunderstanding in the media on the reports we got this week. Considering how tight inventory is, Existing Home Sales, which make up 85% of the housing market, came in very strong at 9.5% higher year over year. The median home price is up 14.8% year over year. This does not mean that homes are becoming less affordable, but the media would say otherwise. The media makes the mistake of considering the median home price as appreciation. The median home price is simply the middle-priced home that sold, which is currently at $311,800. This means that half the homes sold above that price and half the homes sold below it.

Tight Inventory

We must recognize that higher priced homes are selling at a more accelerated rate, which helps to push the median home price up. Why is this? This is because there is such tight inventory, especially at the lower price levels. Overall, inventory is down 19% year over year and this is much more heavily weighted towards lower priced homes. Something else to consider is that the first time home buyer market was at 34% just a few months ago and now came down to 31%. This is not to say that there is weakness in the first time homebuyer area, rather, this means that there are not enough homes for first time homebuyers to choose from.

Jobs and Unemployment

Initial Jobless Claims measures the number of individuals filing for unemployment for the first time. This number dropped below 800,000 which is a good sign as initial claims were staying above that level for a while now. Continuing Claims measures the number of individuals that are continuing to receive benefits after their initial claim, and these benefits can be received for up to 26 weeks. This number came down from over 10 million to nearly 8 million. After an individual’s 26 weeks of benefits run out, they can then opt into Pandemic Emergency Unemployment Compensation (PEUC). This number increased by 500,000 to 3.4 million. We saw people moving off of continuing claims and moving into PEUC, which pushed the continuing claims number lower. The headlines would not make this sound like an improvement, but overall, we are seeing the total number of people receiving benefits decrease by about 1 million.

Overall, we can conclude that the market is very strong, there is high demand, and jobs are continuing to grow.

The News X Recap!

In our lead story, the Mortgage Bankers Association (MBA) announced this week that purchase originations are expected to grow 8.5% to a new record of $1.54 trillion in 2021. After a substantial 70.9% jump in activity in 2020, MBA anticipates refinance originations will slow next year, decreasing by 46.3% to $946 billion.

Don’t believe the Rate News? Another week, another glut of news articles claiming mortgage rates are at all-time lows. While no one is intentionally trying to deceive you, the news is deceptive nonetheless.

Black Knight, Inc. released insights on both serious mortgage delinquencies and forbearances which showed that both have improved from the start of the COVID-19 pandemic.

Existing home sales jumped for the fourth consecutive month in September, the National Association of Realtors reported yesterday, reaching their highest level since 2006.

Merica! Want to move to South Dakota? House sales in South Dakota are “booming,” and Gov. Kristi Noem is encouraging others to move to the state that “respects Freedom.”

New York coronavirus exodus fuels ‘gangbusters’ Maine real estate boom.

In other Financial news…Looks like Goldman is up to its old tricks again. Goldman will pay $3 billion, and will claw back executive pay over their role in corruption scandal.

TLX Note: We need to make it a part of our business to spend time educating homeowners that are targeted due to their age. This story is one that I see all too often.

Bowtie Economist Quick Hits

The 8/20 US trade deficit hit $67 billion. After inflation,

the deficit hasn’t been this high since 2008. Imports have largely recovered

but not exports. This is because the US imports goods but primarily exports

services, and visits by tens of millions of foreigners to US for vacation and

hundreds of thousands for higher education are not happening. Similarly,

Hollywood movies aren’t being screened and thus royalties aren’t being paid.

While equity prices have rapidly recovered from their 3/20 lows, the recovery means much less for the economy than in the past. In 1973, publicly traded firms accounted for 41.4% of total non-farm payroll employment. That percentage was just 29% in 2019. Why? In the 1950s, AT&T had the highest market cap and was the top US employer. Today, Apple is most valuable, but they are the 40th largest employer.

While there is perpetual talk about increasing student subsidies to boost college attendance, the problem is schools will not increase enrollment. Thus, additional aid simply causes tuition inflation. Instead, push schools, via subsidies, to boost class sizes, with the subsidy rising with enrollment. This increase in student acceptances and reduced exclusivity will boost competition, put downward pressure on prices, and thus allow more persons to attend.

Good things come to those who Mastermind! Have you joined the Mortgage X Mastermind yet? I would like to invite you to join our community that is 100% focused on helping MODERN industry professionals crush it. 

The Vieaux

Brian Vieaux - President of FinLocker

It was an eventful week at FinLocker. On Monday we announced a strategic partnership with TransUnion, following their investment in our Series A capital round. Among the credit bureaus, TransUnion is the strongest in data and propensity modeling.  What does this partnership mean for mortgage originators?    

TransUnion will package its lead generation and servicing solutions with FinLocker to provide updated credit and consumer information to loan originators. Additionally, TransUnion will offer its best-in-class marketing suite of solutions to identify high quality leads so originators can reach consumers they are looking for, be it a veteran, a person with home equity looking to consolidate debt with a cash out refi or an aspiring first-time homebuyer.

We have been talking about first time home buyers and specifically building “next year’s pipeline today” over the last month or so in this newsletter. FinLocker and TransUnion provide originators with consumers (leads) who are likely to be next year’s (and beyond) home buyers AND a custom branded technology tool to groom and prepare that consumer (lead) for mortgage readiness. 

TransUnion’s modeling and algorithms filter out, based on activity in a consumer’s credit profile, first time home buyers who will transact in the next 6 to 18 months.  Invited to a locker, the consumer is guided through their homeownership journey in an originator’s branded instance of FinLocker.

When the consumer achieves mortgage readiness (potentially months or longer down the road) they are already in the originator’s eco-system. The data aggregated in locker is used to pre-fill the mortgage application, removing much of the friction that typically occurs at the point of sale.    

Lending, Leadership and Life

Eddy Perez – President & CEO of EPM

In this episode of Lending, Leadership, and Life, Eddy is talking about the topic

"new". With everything that’s going on in the world right now, right NOW is the best time to try something new!

What’s something new you want to try?


Non-QM X: Highly Qualified Non-QM News

Tom Hutchens - EVP of Production at Angel Oak Mortgage Solutions

It’s one thing to add non-QM to your product line-up; it’s another to effectively promote these purchase products — ultimately preparing your business to remain strong in a post-refi boom environment.

Like executing any successful marketing campaign, this will take some hustle. So, how should you start promoting this portion of your business?

Social media

Make yourself a non-QM expert on Twitter, LinkedIn, Instagram and Facebook. You can directly reach borrowers who might not even know they fall into the non-QM category. Create content that speaks to their needs. Capture their attention with one-pagers or educational videos.

News outlets

Pitch yourself to local news outlets and TV stations. Explain how you can help educate their audience on housing trends, what non-QM is and how it can help more people purchase a home. These opportunities will not only expand your non-QM thought leadership, but it could also bring your entire business to the next level.

Conferences and events

Attend (in-person or virtual) networking and business owner events that could attract non-QM borrowers or Realtors. This highly-targeted strategy helps to ensure that you get in front of individuals who need the services non-QM can provide. Make sure to bring marketing content with you!

Don’t have access to develop your own non-QM marketing materials? Angel Oak is here to help! Feel free to reach out anytime!

Mamapreneur: Real Talk with a Side of Mom Jeans

Jess Vogelpohl Southwest Coaching

“In any endeavor, master the basics first.”


Things not going as planned? Not where you want to be? Feel like you’re spinning your wheels? Maybe you are derailing yourself by getting too creative before you have mastered the basics. Scale it back a notch and ask yourself if you are truly and consistently mastering the basics. I bet the answer is, no. Yep, I said it!


Build your foundation first, then start adding the fringe! 🏠


❌ If YOU are not Motivated - YOUR team definitely isn't!


❌If YOU are not managing your schedule - YOUR team definitely isn't!


❌ If YOU aren't building relationships and prospecting...guess what.







The ol' pot calling the kettle back phenomenon.


Get real for a sec - YOU needed help before all of this. AND THAT IS OK.


I love your humility and willingness to say "I don't know everything."




All of your team's hurdles, ARE GETTING WORSE!


🚦Permission to give advice?


Take a look in the mirror. If you’re not engaging in the things you want your team to be doing, then there’s problem numero freaking uno. Do something about that.

Podcast of the Week!

You Have to Know Who You Are in this Business w/Todd Bitter


Podcasts of the REAL Disrupt Network

Positively Charged

The Marketing Trench

Confident Closers

Blondes Have More Funds

Next Level Loan Officers

Laugh Lend and Eat

Treasure Coast Podcast

Charlotte Real Estate Buzz

Culture Matters Podcast

Virtual Coffee with Estie Briggs

Mortgage X Podcast

Mortgage Interrupt

Mortgage Industry Professional of the Week

Jim Black – All Cal Financial


Make sure you tell Jim you saw him in The Letter X!

ANDYGRAM – 75 Hard Thoughts


Every Person Counts

I get this question every single day…

“Hey Andy, I don’t have a big following like you … but I want to make an impact on people’s lives. What should I do?”

I always tell them…

When I started making posts about success…

I would get 2 likes…

And one of them would be my dad.

No, that’s not an exaggeration.

But I kept going…

My motto was, and is still the same today:

If my post helps 1 person get better…

It’s worth it.

Everyone wants to make a huge impact on thousands of people right away.

And when they realize they can’t reach thousands of people with their first message…

They never take action at all...

And they impact 0 people.

If you’re trying to make a difference in people’s lives…

Start small…

Focus on helping 1 person.

If you make an impact on 1 person, they will tell their friends how you helped them…

Which gives you a chance to impact more people.

And over time…

You’ll be making an impact on thousands of lives … just like you set out to do.

Mortgage X Marketing Manifesto

Andrew Pawlak, CEO of Leadpops

In the last couple TLX Marketing Manifesto insights, I shared a little bit about

"conversion rate optimization."

Part of CRO is understanding the friction points in your marketing so that you can test alternatives that might help you pull in more opportunities to do business.

One of the most common friction points for MLOs is trying to use their 1003 as the call-to-action.

Meaning, they'll post on social media, send emails, do videos, etc. with the  next step being for the potential client to APPLY.

Whoa, whoa, whoa there! That's a bit much for a "first date," don't ya think?

After all, that's kind of what this is. It's early in the relationship, we don't know each other, and LOs are going for a homerun. 

Let's take a step back and look at it from the consumer's point of view:

I don't know you. I've not spoken with you. I saw a couple videos and I've seen some good reviews about how you've helped people...

That doesn't mean I'm just jumping into a 1003 application.

Most people aren't ready to jump into a loan application yet. The words "Apply Now!" are not compelling, and a lot of people are weary of just calling a salesperson.

It doesn't mean they're not serious.

It just means we need to warm them up a bit and make it easier for them to raise their hand and say, "I'm interested and I'd like to talk to somebody."

“Apply or Die” is NOT a good approach to marketing, nor does it provide the best service to your clients and referral partners.

Most consumers are not ready to jump right into a loan application without speaking with someone first.

Referrals are not a slam dunk either.

The words “Apply Now,” & “Apply Today,” etc.


A good online 1003 is a great customer service tool… But it’s not a marketing/lead generation tool.

No matter how “Rockety” your 1003 is—it won’t help you get NEW clients.

Here are a couple dozen other ways you can use call-to-action language to pull people in without referencing "Apply."

"See If I Qualify"

"See If I'm Eligible"

"Do I Qualify?"

"Am I Eligible?"

"How Much Can I Afford?"

"How Much Can I Save?"

"Calculate My Payment"

"Calculate My Savings"

"See Today's Mortgage Rates"

"Verify My Eligibility"

“Get Pre-Approved”

“Get Pre-Qualified”   

"Get Pre-Approved Now!"

"Home Purchase Qualifier"

"Refinance Rate Checker"

"Lower My Rate Now!"

"Lower My Monthly Payment"

"Start Saving Now!"

"Get My Custom Rate Quote!"

"Get a Rate Quote"

"Get Started"

"Start Here"

"Start Now"

Thanks, and catch you on next week's, "The Letter X!"

Remember to share your personal referral link below for a chance to win a $50 Amazon Gift Card! I hope you enjoyed TLX #27! Have a great weekend.