The Law of Garbage Trucks

One day I hopped in a taxi and we took off for the airport. We were
driving in the right lane when suddenly a black car jumped out of a
parking space right in front of us. My taxi driver slammed on his
brakes, skidded, and missed the other car by just inches! The driver of
the other car whipped his head around and started yelling at us. My taxi
driver just smiled and waved at the guy. And I mean, he was really
friendly. So I asked, 'Why did you just do that? This guy almost ruined
your car and sent us to the hospital! 'This is when my taxi driver
taught me what I now call, 'The Law of the Garbage Truck.'

He explained that many people are like garbage trucks. They run around
full of garbage, full of frustration, full of anger, and full of
disappointment. As their garbage piles up, they need a place to dump it
and sometimes they'll dump it on you. Don't take it personally. Just
smile, wave, wish them well, and move on. Don't take their garbage and
spread it to other people at work, at home, or on the streets. The
bottom line is that successful people do not let garbage trucks take over
their day. Life's too short to wake up in the morning with regrets,
so...Love the people who treat you right. Pray for the ones who don't.
Life is ten percent what you make it and ninety percent how you take it!

Have a blessed, garbage-free day!

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Great Quote I Found Today...Had to Share!

"People think a soul mate is your perfect fit, and that's what everyone wants. But a true soul mate is a mirror, the person who shows you everything that is holding you back, the person who brings you to your own attention so you can change your life. 

A true soul mate is probably the most important person you'll ever meet, because they tear down your walls and smack you awake. But to live with a soul mate forever? Nah. Too painful. Soul mates, they come into your life just to reveal another layer of yourself to you, and then leave. 

A soul mates purpose is to shake you up, tear apart your ego a little bit, show you your obstacles and addictions, break your heart open so new light can get in, make you so desperate and out of control that you have to transform your life, then introduce you to your spiritual master..." — Elizabeth Gilbert

Message to me from Ken Cramton

The following is an email that I received and had to blog:

"OUR MORTGAGE INDUSTRY- UNDERWRITING GUIDELINES- IMPORTANCE OF CREDIT SCORES" 

Putting things into perspective enables priorities to be established and, more business opportunities to be executed.  These past 12-18 months have been very difficult for our industry.  Clients and realtors have had to experience and ultimately face disappointment with decisions handed out by lenders as a result of the support industry in which we all subscribe.  Investors, the secondary market, private mortgage insurance companies, and the agencies, Federal National Mortgage Association as well as Federal Home Loan Mortgage Corporation have all changed the face of our business.  Government bailouts, over-reaction in Congress, the National Elections, have ushered in a changing of the guard. 

 

Realtors who have been in the industry for years have experienced more changes in how you do business and your clients have become more careful with their decisions on mortgages, housing, and life in general.  There is a cloud of doubt with things that many took for granted in the past.  Valuations have gone through a radical period of decline.  Net worth has gone through a remarkable change in a very short time.  Personal assets are under assault and people are generally retreating into a more controlled stance of buying and accumulating wealth.  Identifying mortgage solutions has become a difficult task based on how we operated in the past.

 

Perhaps it would be helpful if I attempted to outline in brief format what we have seen and why people are having a difficult time with the mortgage process.    What has happened?  With the decline in values and the oversupply of homes on the market we see balances on current mortgages exceeding the value of the collateral secured by the mortgage.  Foreclosures galore in all sections of the country, some worse than others, are rampant and this has added to the unsold inventory from which to make a selection.   As with the case of any commodity, prices go down when you have an over-supply of anything.  The economy, which is based on a vibrant housing market, has declined significantly.  Employers are shutting down their businesses, employees are losing their jobs, and there is fear and uncertainty with people’s ability to repay their debt.  Credit card issuers are declining credit at record numbers and lowering or canceling open credit lines to lessen the liabilities on their books.  Credit has become tight and in some cases banks are not lending as they have their own balance sheet issues.

 

Congress and Investors have in some cases over-reacted in changing the rules and guidelines.  This is always the case when you experience a radical change in the business cycle.  Minimum credit scores have been implemented on all types of loans and private mortgage insurance companies have become more selective in those loans they will insure.  Down payment requirements have gone up and the standard 30 yr. fixed rate conventional mortgage has been totally re-written to the extent that many heretofore clients can no longer qualify for those mortgages.  What used to be an acceptable level of credit score of 620 has now been raised to 680.  In some cases, you‘re required to have as high as a 720 or greater to get the best option on a rate.  Anything less requires higher adjustments to the rate.

In addition, there are restrictions on the down payment to avoid the higher rate but these are very limited.  Private mortgage insurers have stopped issuing mortgage insurance in declining markets which are identified by zip code all over the country.  Without mortgage insurance you are required to put minimum of 20% down.  In many cases a lender can no longer quote a rate to a realtor/client until a credit report is pulled and the assets to close are verified for the down payment requirements.  This has been a radical change to most realtors.

 

The Federal Housing Administrations FHA loan has become the most popular format of financing in our market because it allows more flexibility in many parts of the underwriting process.  Down payments are allowed with as little down as 3.5% although that was recently increased in January of this year.  There are more couples who can qualify for this loan and there are some options available to offer reduced payment rates in the early years of the mortgage with the popular 2-1 buy down being offered by many builders.  The maximum loan cap has been raised to the $270,000 level in our market and that allows more house than before.  There is the popular Alabama Housing Finance Authority (Bond Loan) that is used in connection with FHA lending that provides for 100% financing.  This 100% financing is gone on conventional loans as the popular first and second piggy back mortgages are gone as well as the limited documentation loans.  All loans must be fully documented now and there is no more stated income product which led to many foreclosures in the past.

 

In closing, partnerships and business relationships are more important now than ever.  The realtor can no longer rely on a business plan used in the past when it comes to getting people qualified for a mortgage.  Having a relationship with a lender is paramount to success and having access to that loan officer 24/7 is critically important.  If I haven’t left you with any other thought but this please exercise your best judgment and select a partner that can make your sales elevate to another level and remove the current mystery of the mortgage solution process.  Competent and proven leaders in our industry are eager to serve you and would welcome the suggestion as a means to help both sides of this equation.

 

Finally, many changes are currently happening with regard to those lenders remaining and how they have to operate.  Brokers will be a thing of the past.  If you don’t have your own warehouse line in which to fund mortgages, you cannot succeed.  Third party originations are being prohibited and changes are coming in those that can obtain mortgage insurance and how you select an appraiser.  Just be on the look- out for that.  Thanks for allowing me to attempt to state what some of the changes you have experienced and, why?

 

Kenneth W. Cramton, Jr.

Regional Vice President

Platinum Community Bank

formerly HMC - Home Mortgages Co.

813 Estella Drive

Fairhope,  AL 36532

251-990-5897

251-604-6661

 

P.S.  It is time for those clients that have been sitting on the fence to get into the market.  This window of low rates will not last long.  It is inevitable that they will go up.  Someone ask me the other day what kind of rate you could get with good score and down payment and I said 4.5%.  Then they said, “I will wait until they get down to 3.5%.”  That would be a mistake.

Local MerchantCircle Reviews-III

Written for Christine Linson Gallery in Fairhope, AL

Must See

When visiting our great city, you must stop by the Christine Linson Gallery. Ms. Linson gracefully depicts our wonderful southern hospitality in various ways that you can take home to enjoy the memories of your stay.

February 21, 2009 by Christian Green, KW Commercial

Written for Tomaso's Martial Arts in Fairhope, AL

Great Family Fun

The Tomaso family gives so much to the community by going into local schools to speak about bullying and self confidence. Mr. Tomaso stresses the importance of physical health and agility through his positive attitude toward Martial Arts. Great atmosphere for kids of all ages to grow.

February 21, 2009 by Christian Green, KW Commercial