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Experience as a Mortgage Lender on Twitter

by Owen Raun
 
I have had a twitter account since summer 08.  Really have not been playing on it too much until recently.  I am still trying to figure it out but here are some things I have noticed and some suggestions

Learned:

A lot of people tweet way too much

I get frustrated when I follow someone that mostly tweets things like “I’m at Starbucks now” or “Can you believe the weather today?” or “I’m going to the dentist… again” 

What is with “follow Friday”?  People seem to want to tell everyone that follows them that other people are now also following them – and they do it on Friday

Most of the people I follow, follow me back… and vice versa

A good handful of loan officers are active on twitter

Linking in your tweet to a blog that you found interesting is good – if it’s unique and relevant to your focus on twitter, links to last night’s Idol video on YouTube is not

I have yet to figure out the ins and outs of RT and DT (retweets and direct tweets) and I think others are confused on this too

Suggestions:

Say relevant things when you have something to say

Use twitter as a mini blog system not a mass email spamming system or facebook “insight on my very interesting life” system

Use tweetdeck and create keyword searches where you can find people that you might be interested in following.  It also allows you to filter down the many that you follow to the ones you actually would like to stay up with.

Use keywords in your tweet so others can find you

Not sure this will be a direct lead generation system but could be a good way to be “found” enough to drive traffic to your blog or company website

About it for now – from what I can see Dan Green (@mortgagereports) and Kelly (@quickenloans) do about as good a job with this as any mortgage person or company and Bill Rice (@billrice) does a good job of lead generation and Mortgage Information from a non-lender.

 Comments?

FHA Lending Stats

by Owen Raun

These stats from Inside FHA Lending

1 - 4th quarter 08 FHA volume made up 30% of mortgage originations.  More than 5 times is level 4th Q 07.

2 - FHA Market Share for all 08 was 17%; previous market share high was in 1994 at 11.9%

3 - Texas based lenders (that I know of) on the top 50 list for originations in 08 include:  Cornerstone Mortgage, 1st Continental, CTX, Allied Mortgage, and Prime Lending.

4 - FHA Originations Ranked by State  Ca, Tx, FL, Ga, Md, NJ, Va, Ill, NY, Az – these make up 49% of the market

If there is every a year where someone can get in on low rates and low home prices - this is it.  What a great time to be a first time buyer.  I bought my first home in 1984 for 62k with a mortgage of 10.375% - and that was “cheap” mortgage bond money - ouch! 

by Owen Raun

I Was trying to come up with a focused blog but seem to keep bouncing as I write this.  So here are some things I have noticed that affect some/all of us in mortgage lending:

1 - Big Lenders have staffed up with qualified people and are really providing great service to their correspondents

2 - HVCC is really hurting small brokers and their ability to provide the great “local” service and the “shine” they give to local Realtors.  Lots of grinding of gears here. 

3 - Big Banks have moved people into their retail channels and are now our biggest competitors.  In previous years our biggest competitor was the small local broker.

4 - State Regulators have either stepped up their audit practices or there are fewer lenders to audit.  We had audits from 3 states last year, and so far in 09 we have had visits from 5 states.  Washington sent 4 people to sit in our conference 4 days to look over files we had closed in Washington.  Not all were up on common mortgage terms.  All on our tab. 

5 - Home values are still falling, at least in the declining market states. We have had a couple problem loans that we had to repackage and resell.  In Ca went from a value of 510k in Oct 08 to 280K today and another went from 130k in Feb to 116 this week.   Awaiting a 3rd appraisal on a property in Mass but it looks to have dropped from 250k to 220k give or take in a month.  Calgon!

6 - Warehouse lenders are still scared.  Not only to the perceived risk in mortgage lending but as individual bankers.  Bankers are shell-shocked and very few want to do anything different then what they did yesterday.  If they do, they risk standing out and drawing the eye of peers/bosses and regulators.

7 - Since the government is on both sides on the supply/demand curve - doesn’t that mean they are regulating interest rates?  Does anyone really think rates will be going up soon?  Jeez, I think we are under 5% on a 30 yr fixed for at least 3-6 more months.

All for now.. 

All Non-Depository Mortgage Bankers have this same issue.  Traditional Warehouse lenders have exited the business, stopped expanding or have cut back.  I have done my own research and have the following to present:

First Tennessee - this is our only remaining warehouse lender, taking applications but only approving 1 maybe 2 per month and just the cream of the crop.

Wells Fargo/Wachovia - understaffed but trying to ramp up.  They are doing the noble thing by working on approving good lenders that are about to lose some of their existing capacity from no fault of their own.

National City - out of the biz

Guaranty - out of the biz, I had heard they would allow lenders to use their lines through their renewal dates but have also heard this was cut back to July across the board.

Texas Capital - no new applications

Countrywide - Bank of America.  Cwide chose to not renew us in Nov 08 for our covenant violations (loss - duh).  In a meeting with them at the MBA Secondary Conf in Chicago they said they had little ability to add lenders as their total capacity allotted to them from BofA was not expanding.

Chase - looked like a good option for us, and then within a week they raised their min net worth requirement to 5M, and then exited the business.  Have heard this week they are going to stay in biz but for 10M plus net worth lenders (that a’int us).

Colonial - not taking new clients

Comerica - 10 or 12 to 1 leverage ratio, not taking many new clients, 2M min net worth

Gateway Bank - they received a “cease and desist” order from OTS.. hum..
.
Flagstar - 20 to 1 ratio - sounds promising, need to fill up the line with Flagstar correspondent biz however but that’s ok.  Waiting for my rep to email me back.

GMAC - fingers crossed, they have a warehouse express product we might be able to get in line for - all GMAC correspondent products through it - 3 day funding notice.  Their “normal” warehouse group is trying to take care of lenders that already sell a bunch to their correspondent group.

Horizon Bank - no new apps for a while

Southwest Securities - no new apps for a while - trying to diversify outside of TX a bit.

US Bank - 5M net worth, looking for cream of the crop in new apps

Viewpoint Bank - at the MBA Secondary - something like 16 new clients added from 125 applications and they are close to their capacity

That’s my “top of mind” list.  Please share a comment if you have an update or a new warehouse lender to add.  Also, there is a trade/lobby group trying to help in DC at
http://www.warehouselendingproject.com/

Lenders of all shapes and sizes have craved for another “real” refinance boom.  One based on better terms for the consumer not just the over escalation of home value or the consumers need to turn that created equity into cash.  In my book the last refi boom was 2003 - 2004.  Back then our limiting factor was the hours in the day.  We could originate as much volume as we could get our hands on.   We had plenty of good people, good sources of leads, excellent relationships with our investors, plenty of warehouse capacity and a process that can push rope through a key hole.

Today’s refi boom in some ways is better than 03-04.  Rates are better and have remained so for a longer time period and look to continue to stay below 5 for some time.  And there are fewer lenders so the competition isn’t quite so fierce.

However, today, no lender can fully take advantage of this refi boom.

Brokers:

Brokers are faced with much higher hurdles to originate.  These come in the form of additional documentation requirements, appraisal rules that are cumbersome and time consuming, fewer investors to work with, increasing state licensing requirements and a reputation of being the most “unreliable” source of business for the few remaining US Banks. That leads to unfavorable pricing for their clients and a service level that lacking.

Lenders:

Warehouse lenders have deserted this industry in handfuls.   Last year at this time we have approx 80M worth of funding available and even though our net worth is more and we are profitable ytd, we only have 22.5M and that is in jeopardy.  And thank God we have that.  Amongst the lenders I talk to this is our collective 900 pound gorilla.  We can all handle the additional state license issues, investor scrutiny and appraisal rules - but holy cow - we have to have capacity to fund loans.

Banks:

The Small to Mid-size Bankers I know do not have the issues that brokers and direct lenders do but they are limited by their appetite.   Most do not want the “unlimited” amounts of new loan volume they could be creating.  When they look in the paper they see the congressional demand that they lend more to Main Street, but then when they have coffee with their hovering regulators, they are questioned about every loan they have done and are considering, scaring them back into their conservative holes. 
More on our specific issues in the next post.

Owen Raun with Online Mortgage Podcast and Bill Rice with Kaledico speak with Jay Weintraub, the founder of the upcoming Leadscon conference in Las Vegas.  Jay gives us his perspective on what challenges lead buyers and sellers are currently facing.

Listen Here

Bob Harris, President of the Lendingtree.com exchange talks with Bill Rice and Owen Raun of the Online Mortgage Podcast.
Bob discusses his role at Lendingtree.com and expounds upon their initiative for offer standards as well as a fixed filter option on the horizon.  He also discusses the spin off away from IAC and the formation of the new “parent” company Tree.com.   Bob is a veteran in the mortgage lead generation industry. His thoughts and perspectives on Lendingtree.com and our industry are refreshing.

Click Here To Listen Via The Web

Click Here To Listen and Subscribe in iTunes.

Payam is one of the originators of internet based lead generation. Starting with Autoweb in 1994, then moving to a Webvan model for dry cleaning and back to lead generation with Reply, he has experienced a great deal which he shares with us on this podcast. He explains Reply’s lead marketplace and lead exchange model and how leads enter and exit these systems. Although relatively new to the mortgage generation business Reply handles Auto, Special Financing and Real Estate leads currently and looks to expand across more categories.

Click Here To Listen On The Web
Click Here To Subscribe and Listen in iTunes

1st in a series of talks with Leaders in the Lead Generation Industry Marc Diana has been in lead generation since the late 90’s.  He discusses his experiences and perspectives on our industry as well as Leadpoint’s unique business model and multiple sources and products. Marc also comments on what he feels makes for a successful lender and for what the next year holds for our industry.

Click Here To Listen To The Podcast
Click Here To Subscribe in iTunes

RMC Vanguard Mortgage Corporation announced today the conclusion of the first “Lenderpalooza” event held in Houston, Texas. The objective of “Lenderpalooza 2008” was to create an informal atmosphere for the Leaders of On-line Mortgage Lenders to share ideas and best practices.

Topics discussed included maintaining profitability, technology improvements, sales, customer service and brainstorming with the goal of an enhanced customer experience and increased internal efficiency among the participants. Attending the round table discussion were:

Saul Pohn, CEO/President, First Residential Mortgage Network, Inc.,
Geno Zale, President of Lending, First Residential Mortgage Network, Inc.,
Timothy Burke, CEO, Nationwide Lending Corporation,
Monte Robbins, CEO/President, CapWest Mortgage Corporation,
Kurt Simons, Chief Financial Officer, CapWest Mortgage Corporation,
Jeffrey Douglas, CEO, Wyndham Capital Mortgage,
Owen Raun, President, RMC Vanguard Mortgage Corporation,
Matt Kiker, Chief Financial Officer, RMC Vanguard Mortgage Corporation.

Regarding the event Timothy Burke, CEO of Nationwide Lending said, “Having been a part of so many advisory type meetings through the years I’ve learned that the eventual success of the meeting is always predetermined by the character of the people and companies who are invited. This was the best lender meeting I’ve ever attended!!”

As part of the dialogue, Mike Minnis and Kirsten Harkin from Service Link and Jamie McDonald and Ed Powell of Sparkroom presented their products to the group.

Speaking about the take-aways from the conference Owen Raun is quoted as saying “Sharing your best practices or secret sauce with your competetitors is an intimidating proposition. I believe we all have mutually benefited by sharing our various methods of dealing with the problems we each face every day. I’m looking forward to Lenderpalooza 2009!” ###