Blog of the Mortgage

January 27th, 2009 10:37 PM
The Press has really been helping to get our phones to ring (well yours anyway- which leads to ours) by publishing stories about Rates headed down to 4.5% and being lower than any time in the last 50 years etc.
There's two sides to that coin.
1. Great free Press and with so many competitors having left in the last 18+ months and our marketing budgets being swallowed up by more important items like the Rent, food, insurance etc.
2. The flip side is you can't perform to a 4.5% rate even with 2 points cost today (1 for you and 1 for the borrower to get that rate).

That all makes for interesting conversation on the sales level. I will tell you though that the consensus in the marketplace is that rates will indeed eventually roll down hill into the high to low 4 world and you DO NOT want to miss that opportunity.

Capacity at Issue:
As you've already seen, many lenders with all of their cut-backs and layoffs and center closures are having significant capacity issues with respect to turn times.
30+ days in underwriting?
5 + days in conditions?
Funding based on lock expiration?
these are all issues that many lenders will encounter simply because they are the most well known or most popular or best priced in the market.
We all know that Pricing can be the end of consistent business when turn times stretch past the 1 week mark for underwriting (hence my company's commitment to proper staffing and faster turn times)

Solution with Franklin American:
There are a number of ways to be prepared for these capacity issues and the most successful shops I've seen in the busiest days would submit entire pipelines to their favored source (I know you'll choose us for our service levels and my commitment to your team and business).

These would all be floated in with credit approvals and appraisals pending. Sometimes these loans would sit about for 90+ days. But then the market would drop and the price and rate would be there and BOOM! The loans were approved and all that remained was condition clearing time frames and docs/funding which at Franklin American means all of 5 total business days right. Plenty of time to fund on a 15 day lock.

So, if you got an application that you know will perform once you have the right price don't risk it.
Send it in to us, get underwritten, approved and ready to go so that you can move quickly once the price comes into your zone.

There's a significant benefit to submitting before locking as well, your pull-through with your lending partners improves dramatically as you fund more of your locks. This not only benefits the lender with more profitable business but also benefits you as the Broker in gaining preferred relationship status with them for your quality business, nice exchange for a little planning eh?

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Posted by Raoul Badde on January 27th, 2009 10:37 PMPost a Comment (0)
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