Gene Mundt - Let's Talk Mortgages & Real Estate!

Announcing ... You Can Now LISTEN to my Mortgage and                Community Blog Posts FREE via iTunes!

I am truly excited to be able to make this announcement today!        

My Mortgage Blog  posts can now  be heard FREE via iTunes!             

I hope you agree ... it's a handy idea and great way to hear Mortgage, Real Estate, local Community Information, and more!       

Valuable information can now be found at your fingertips ...  it's available for your listening pleasure in your car, on iPods, MP3's,  computers,  and more ... at your convenience!               

It's so easy to listen in too!  If you presently don't have iTunes, just download the FREE available      iTunes application.  Register, sign-in, and then go to PODCASTS (found in the menu on the left of the iTunes site).       

My mortgage blog podcasts can be found under:  

Genemundtmtgbanker Blogs       

Click on my Blog or topic you want to hear and learn about.  It's as simple as that!  Listen to one blog post ...  listen to them all!          

Then ... contact me should you have questions or comments regarding what you hear!  I'll love to hear from you and be happy to assist whatever way I can!       

Thanks for listening to my Blog posts on iTunes ... and please let me know what you think ...

    Effective on August 1, 2010, Fannie Mae will be offering a new program "Home Affordable Foreclosure Alternatives (HAFA), that is focused on helping those in Pre-Foreclosure status and Short-Sales.

     I see some pre-emptive moves taking place from Fannie Mae within this program, and I find that all positive ... not only on the Homeowner's behalf, but the real estate professionals' behalf, as well. 

     Will it cure all the ills that we are finding within this portion of the industry right now?  Probably not ... but it does provide some new and revamped options with which to face them.

     I'm sure inbetween now and the effective starting date in August, there will be much more information released and much more discussion that takes place concerning HAFA, but after reading through the initial information released up to this date ... I found the following to be the finer points  concerning this new program:

     Further highlights of this new Home Affordable Foreclosure Alternatives (HAFA) program will, as I said ... be forthcoming and discussed at that time. 

     Until then, this Home Affordable Foreclosure Alternatives (HAFA) at least provides a ray of hope for those Homeowners in these dire predicaments.

     I have been in contact and working with a prospective client for well over a year while he and his wife were tackling some credit issues.  This couple took it upon themselves to gear-up their home search once again and have actually found a property they are interested in purchasing.  After being in the works for so long a time, I obviously had to run an updated credit report to start the purchase process again.

     To my surprise ... because I had been assured that the correct measures were being taken to improve scores ... the new credit scores came in lower.  A monthly mortgage payment had been made late once ... along with some other more minor payments ... and their credit numbers had taken a dive.  The lower credit scores are now such that they are, once again, in jeopardy of not getting financing for a home they want. 

     Critical points were made during the many conversations we held concerning the need for timely payments.  Educational materials were passed on.  Calls were made, mail and emails sent.  Hands pretty much held.  It's not as though they didn't hear what it was going to take on their part to increase their credit scores. 

     Where could there have been any misunderstanding about the importance of these issues?  What could possibly make them think that ... having approached their credit much the same as before ... that they would now at this time be able to reap a different result from the last?  

     Ironically, the very evening I ran the updated credit report for this couple, I read an article on "Yahoo - Personal Finance News" that made complete and utter sense to me regarding how so many find themselves incurring problems revolving around personal credit, financial responsibility, and credit scores.  It also clearly outlines how to address this issue with the next generation so they don't face the same problems with their finances.

     The article was named "The 15 Money Rules Kids Should Learn" and was provided to Yahoo by Jeff D. Opdyke of the Wall Street Journal.  The crux of the message contained within this article was that kids need to be taught good financial lessons and habits at a very early age and before they start feeling the financial peer pressures of other children, TV, and more.  By the time a child reaches their teens years, a parent has lost much of their ability to persuade their child from poor decisions.  They may have also seen and learned poor financial decisions from too many adults surrounding them.    

     The point is made, that if we are to have adults that have the ability to make sound financial judgments regarding their personal finances ... we have to guide and teach our children how to navigate themselves down the correct financial paths from the earliest of ages.  Starting these lessons while young is important.  Later in their lives they are then less likely to find themselves in the position that my clients  face once again.

     I am including the link to the mentioned Wall Street/Yahoo article here, so all can see the 15 steps suggested by the author of this well-written article.  I hope it proves educational and useful to all and that it is printed and used within many homes with young children.

     The link to the article is:  http://bit.ly/cie2jQ

     Last week after a particularly frustrating day, I wrote a message on my Facebook.  It was meant to be somewhat "tongue in cheek", but evidently that wasn't as apparent as I thought it was.  My comment was that I was going to put an educational seminar together for today's home buyers.  The topic would obviously cover the lending process, but would also cover all the many changes recently made within our industry. 

     I suggested that the largest portion of the seminar would be directed at those buyers that had previously closed a loan and were looking to refinance currently.  The focus of this portion would be what a buyer should currently expect during his purchase and financing process in contrast to his prior experiences. 

     The message I was trying to make ... and obviously did so very poorly ... was that expectations are fine if they are reasonable.  That day I was feeling that many of my clients and referral partners expectations were possibly a little "over the top" and I was feeling a little battered.  Thus my comments. 

     Now before anyone gets upset ... let me explain that I think there is an accountability to be met by a lender.  I also think that customers and referral partners are right to expect and demand a high level of expertise, professionalism, knowledge, accountability, honesty, and results from the lender they are working with.  That is not even up for debate.

     My simple point I was trying to make was this ... the customer has responsibilities and obligations within a transaction too.  Today's real estate transactions many times follow a twisting and bumpy path.  Costumers need to know and understand this ... and formulate their expectations around current reality.  

     Lenders and agents are real estate professionals ... not magicians and psychics.   Transactions are simply not conducted or accomplished like they once were.  Everyone involved needs to contribute towards a successful closing.  Everyone needs to do their part.

    My little comment seemingly struck a nerve on Facebook.  I received many responses to it expressing a thumbs-up on the idea.  Many thought a seminar should be mandatory too!  At the time I was being facetious ... but I think I'm on to something. 

     What are your thoughts and opinions?

     This last week or two I've been planning and writing my upcoming Holiday Newsletter.  My wife and I work together on this effort and have   a great time while doing so.

     I mail an actual print newsletter about every other month to all those within my database.  Attorneys, accountants, mortgage customers, realtors, friends, relatives, and more are all recipients.  Typically the articles featured within this marketing piece are of an informative nature or offer up assistance on mortgage lending, home buying/selling, financial, or home care needs.  

     The intent of the Holiday Newsletter is quite different though from those that go out the remainder of the year.  It's more warm, light-hearted, and filled with trivia, holiday food recipes, quizzes, and sentiments of appreciation.  Hopefully, it's something you want to get comfy with and pour a cup of coffee for while reading.

     Finding the articles and content for this newsletter is much more fun to do also, let me tell you!  You can usually find my wife and I laughing about a piece of interesting holiday trivia discovered ... or reminiscing about holidays past as we work along.  Our favorite holiday music or movie may be playing in the background as we work.  It sets the tone for the task very well.

     This newsletter seems to garner the most responses of any newsletter written during the year too.  The fun we have and the time and care we take in writing and presenting it must shine through as we always receive numerous responses from those that read it.   As a marketing piece, it works very well too ... as the phone calls, texts, and emails spike after it's delivered. 

     If you haven't tried sending a Holiday Newsletter out for your customers and friends, I'd recommend it highly.  The effort is well   worth it and it serves to get you (and the recipients) in the holiday spirit all at the same time.     

     Contact me if you'd like a copy of my 2009 Holiday Newsletter!   

     There have been many articles written recently regarding the looming tax    credit deadline for first-time home buyers.  A real debate has been raging ... should or shouldn't the tax credit be extended?

     In the meantime while the pros and cons of this are being debated, I'm experiencing a great number of phone calls asking ... "Can I still take advantage of this credit"?  And ... "Do I still have time to get a deal closed before the cut-off date"?  As the clock ticks down on this program, it is getting harder and harder to answer in the affirmative.  Closings are hard to guarantee and time is terribly short now.  I hate having to tell a young      first-time buyer that they may have missed their opportunity.  It's sure not easy telling a referral partner that message either.

     It's why I was almost giddy when I learned about a new loan product being added to the program menu at our company through Fannie Mae.  This new program is exclusive to Fannie Mae Foreclosed Properties.  No one needs to tell you, there is currently a virtual backlog of home inventory being held by this mortgage giant.  

     In order to improve the housing market, this inventory needs to be moved.  To address this problem, Fannie Mae has now developed and will provide an unique financing opportunity for these properties through qualified, program participating lenders. 

           Some of the Highlights/Unique Advantages of this new program are:

        1.  5% DOWN CONVENTIONAL FINANCING with lower than   typically allowed Credit Scores

          2.  INVESTORS allowed (Non-Owner Occupied) with 15% Down Payment

          3.  NO MORTGAGE INSURANCE Required

          4.  NO APPRAISAL Required

     How does this fit?  How does it help everyone's cause?  Buyers looking to enter the market at low prices tend to search for distressed properties, like foreclosures and short sales.  Pitfalls are encountered by these buyers when the property is appraised or mortgage insurance is denied.

      NEITHER of these issues is a concern with this new product.  NEITHER an appraisal or mortgage insurance is needed. 

    Take these two major issues out of the underwriting/processing/closing mix ... and you have a much better chance at getting a loan closed before the deadline of November 30th!   

    This new program has been delivering new life into the agencies that I work with.  Agents are seeing real potential for immediate assistance for their customers ... and their personal businesses with this dynamite new program. 

     The wheels of change have been a long time coming, but with the advent of this new HomePath loan ... there is finally some hope of improving some of the frustrating circumstances presently before us. 

       A couple of weeks ago, someone asked me if I ever tried to talk business or truly market myself to the others in the group while on the golf course.  Did I view it as part of my overall marketing plan?

     Now my wife and I have had this "argument" and marketing discussion since time eternal.  Bottomline, she thinks I"m full of hooey when I'm telling her my upcoming golf round could mean business for me down the road.  It's become sort of a joke between us over the 32 years of our marriage.

     But, truth be told ... we both DO view the golf as part of the marketing plan we put together for me each year.

     This marketing plan of mine goes beyond the normal golf outing participation and door prize give-aways that seem to be considered as part of our industry's yearly dues.  Ask any loan officer or realtor if they get requests to attend and donate for a golf outing (or two, or three, or more) during the year and most likely you'll get a huge "YES"!  Almost guiltily, I will tell you that my marketing for the year includes funds set aside for golfing "adventures" that go beyond those typical opportunities for participation.

     I host weekly Wednesday night golf lessons year-round.  In Illinois, that's quite a trick in the winter.  Don't remind my wife!  (Thank you Ditka SportsDome in Bolingbrook!)  Business partners are asked to join me at our home in Galena, Illinois, for a few rounds of golf during the summer.  (BTW, Galena, and the surrounding area, has some of the most scenic and budget-friendly golf venues in our state.  And yes, that's part of the reason I chose our home there ... guilty again!) 

     Recently, I hosted a group of business partners at a PGA tournament held close by.  I was able to land a great deal on the tourney tickets and everyone in attendance enjoyed the day together immensely.  My wife says I'm pushing it, but I even see these get-togethers as mini-"leads" organizations.  The relationships within the group are strenthened and we all benefit from that too.  There are always other golf rounds and opportunities that routinely wind up on my calendar too.

     But ... does any solid BUSINESS get discussed during any of those golfing get-togethers?  Probably not.  So what are the true benefits then?  

     I know I learn alot about the personalities of my business partners on the golf course ... good and bad.  It can be a real education for me and I gather real insight.  Let's just say I've discovered a few "sandtraps" and "water hazards" concerning personalities during a round and let it go at that. 

     I also see these as great opportunities to re-solidify old relationships.  I get a chance to celebrate the friendship and also just show my appreciation for what we share.  Newer relationships have an opportunity to gather steam during these times, as well.  I see this all as a great benefit to me moving forward into my actual business day.

     I am convinced that I gain much (both personal and business-wise) through my participation in golf.  And especially when I'm trying to convince my wife that I need to enjoy another round on a beautiful day ...

     That's my argument and I'm sticking to it!   See you on the golf course!

    Unfortunately, even after portions of the new stimulus dollars have been dispursed, many banks are still not lending to small businesses.  The infusion of the Fed's capital has not loosened the lending as we'd like.

    We are now facing the reality of 5 & 7 year balloon clauses written on commercial loans in '02 through '04  having, or soon coming due, as well.  Value on many properties has dropped, and the bank's are not willing to always renew those notes.  If this is what you or your borrowers/owners are facing, what do you do?  What options exist for them or you?  The answer to the dilemma may be found within an unique lending product.

    Please consider the unique asset-based loan ... money lent solely on the size and strength of publicly traded stock.  Some of the benefits of an asset-based loan are:

• There is no reporting of income.
• No appraisal needs to be done. 
• No underwriting is involved in these loans. 

    If the borrower/owner has stock of substantial value, lending can occur at interest rates of 3.5% to 6%, interest-only, up to 80% of the value of the stock.  You, or an owner, can payoff the bank note held with this new loan.  The stock gets pledged as the loan's collateral.

    If you, or someone you represent, is facing this scenario now or in the near future, please contact me for further information.  This loan may afford a great opportunity to the situation you are facing, offer a unique solution to your lending needs, and place you on the right financial path for the future. 

    The opportunity for lending is open for those in multiple areas, as my company and I are fully licensed and able to assist in many states across the nation.  I look forward to speaking with you very soon.

Gene Mundt, Professional Mortgage Banker                                                 www.genemundt.com     Chicago Bancorp