![\"pipeline-press\"](\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/01\/pipeline-press11.png\")
<\/a><\/p>\nWhen I take a potato masher out of the kitchen drawer, my dog hardly pays attention. But when I reach in and take out the cheese grater, she suddenly becomes my best friend. After I started in this business in the mid-80’s, an experienced loan agent pulled me aside and said, “When I look at a loan file or talk to a borrower, I know in less than a minute whether or not it is a ‘do-able’ deal.” Experienced agents have told me that this is no longer the case, given the automatic underwriting procedures, the changed guidelines, the compliance issues, etc. As you can guess, a small percentage of experienced agents have moved back into “private money”, “make sense” lending, since this is where their comfort level is.<\/p>\n There appear to be three big components at play with volumes for lenders: rates, equity, and underwriting<\/strong>. Rate-wise we’re above the lows, but still very good. I hear few folks complaining about rates, but they certainly have not helped spur business in recent weeks. For equity, unless property values stabilize, and\/or move higher, many folks who had equity in their property already refinanced; those that didn’t refi because of values haven’t seen enough of a rise to do so now. And is anyone loosening up their guidelines or their documentation? It would be news to me… One agent wrote to me and said, \u201cBasically there is a reason someone didn’t refi last year, and those that didn’t probably can’t do it now.\u201d <\/em>So we’re left with a purchase business. Fannie & Freddie and large investors feel this year’s market will be about 50-60% of last year’s, and companies are already seeing it. Established companies are adding agents, branches, and perhaps moving into new areas. Others are cutting loose agents, consolidating branches, and in some cases retrenching. What an interesting business.<\/p>\n What are experienced mortgage companies doing right now to help themselves?<\/strong> Name a solid company that hasn\u2019t established clear rate lock policies and controls managed by a centralized lock desk. What good does it do anyone to have old, expired loans in your pipeline? And have good measurement devices: a complete set of management reports to measure profitability, risks, the cost to originate a loan, calculate your gain on sale margin by product, commissions, old loans and\/or loans closed and not shipped or purchased after a set period of time. You\u2019ve heard it all before, right?<\/p>\n Lots of mortgage companies made large profits last year \u2013 some would say that it balanced out the money lost in 2008. But do they expect to make more money in 2010 on lower volumes? Management shouldn\u2019t assume that a decline in profitability is the result of decreased origination volume \u2013 what if volume drops 10% but profits are down 25%?<\/em> Gain on sale margins may have slipped for whatever reason \u2013 overtime, a few bad loans, pricing decisions to maintain market share, etc. And watch those utility bills: I was walking by a mortgage co-worker’s desk the other day, and noticed that she had plugged her power strip back into itself to save electricity! That\u2019s sacrifice! (Yes \u2013 blonde.)<\/p>\n At least rates are cooperating, and last week long-term interest rates declined. Mortgage rates have retreated to the low 5.00% range, and our economy is still \u201cfragile\u201d. Inflation is not an issue and the consumer spending still is relatively slow. Maybe everyone is waiting for 3D televisions!<\/p>\n more news on MBAA application volume, FHA guideline changes, Waren Buffett on bank tax, economy, rates, market, and joke of the day … <<< CLICK HERE TO CONTINUE<\/a><\/strong><\/p>\n \u00a0 When I take a potato masher out of the kitchen drawer, my dog hardly pays attention. But when I reach in and take out the cheese grater, she suddenly becomes my best friend. After I started in this business in the mid-80’s, an experienced loan agent pulled me aside and said, “When I look […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-203039","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/203039","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=203039"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/203039\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=203039"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=203039"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=203039"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"rob-chrisman-daily\"](\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/01\/rob-chrisman-daily11.jpg\")
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