Is anybody out there enjoying this rollercoaster ride? Since the middle of last week we have seen rates rise sharply as a whole, with huge fluctuations from open to close. We lost a bunch of ground, around ½% in rate or so, just in three days. The scary part of this is, there were five FAKE stories that did most of the damage!
- The false rumor about a trade deal between China and the US. It only took 30 minutes for the White House to dismiss the rumor as completely false, but the damage was done and the market began to see rate go higher.
- A politician said it was time to privatize FNMA & FHLMC. This spread quickly, but it isn’t even on the agenda for discussion yet! No matter, just more fuel to the fire!
- If FNMA & FHLMC go private, they will require more than a TRILLION DOLLARS in new cash reserves. Where is that coming from? Higher fees and rates maybe?
- Another part of this was the thought to reduce risk by reducing the DTI ratios down to 45%. Again, not a fact, just a story, but enough to keep the pressure on rates!
- Last but not least, was a THOUGHT that the government should refinance its debt by issuing 50 bonds! While it would take a huge amount of work and no guarantee that the credit markets would even have a desire for this paper; people went into a full panic and rates continued to rise!
So my question to you is, did you get out in front of the rise in rates? Did you have a reason or reasons to share with your clients and referral partners about what just took place? If you did, were you proactively walking them through the issue? If not; why not?
If you aren’t the expert; if you aren’t the trusted resource; if you aren’t out there keeping things calm and explaining what is going on, you might as well be an online lender who just cares about the transaction, not the people or the relationship!
The good news is we recovered nicely Monday and Tuesday. Yesterday we were really doing well before the FED announcement and press conference, and then it was a wild ride! We still closed better for the day, but far from the best levels of the day. So keep informed. Watch rates carefully today and Friday and keep calm and informed. Mostly, don’t panic your people! My belief is that rates will continue lower and could reach all-time lows. It just won’t be soon! It will also not be in a straight line! As you have seen, volatility is something we are going to have to deal with for a while!
Questions or comments: Mike@IMTcoaching.com
I was thinking yesterday that “9/11” was 18 years ago. How fast those 18 years went? I was also talking to a client about a training I did last year called “Crossroads” where I shared the evolution of real estate and mortgage originations from a predominantly realtor referral business to a much larger reliance on consumer direct business and referrals from other professionals.
The talk centered about how nobody knew who “Quicken” or “Zillow” was ten to fifteen years ago, and now they are dominant in the market. How Zillow may have started out as a website for houses, but that made way to selling leads, and now trying to eliminate the agent, the lender, and title companies because they believe that those people are not “important” to the quality of the transactional experience.
You would be surprised to see how fast they went from being supportive to the industry to trying to take it over! How fast did that happen? How quickly did they go from begging agents to post heir listings on the site, and getting agents to work with lenders to pay for the lead information back; to now saying out loud that they intend to replace the agents and the lenders and there is nothing they can do about it because the agents and lenders have become dependent on Zillow for their business!
Boy did that happen FAST!
So what is the game plan? What will you do? How will you compete? How will you set your value to the customer? How will working with you be better for that customer? How will it bring greater value to them? How will you create a better customer experience?
Zillow isn’t alone. Other companies are changing the way our industry works. Ever see “Open Door®”? Redfin® ring any bells? Will Amazon® become the beast of “Prime Real Estate” or mortgage? If you haven’t thought about this you really need too! The crossroads are upon us and you will need a plan to compete going forward!
Keep an eye out for your invitation to the October 22nd2019 “Crossroads Webinar” and “Business Planning 2020” event October 29th2019. These two events will help you see the strategies you can use to take control of your business, and thrive in 2020 and beyond!
Questions or comments: Mike@IMTcoaching.com
We are rolling into September with a full head of steam and firing on all cylinders. The strategies we put in place are really taking hold and Labor Day weekend has been very productive for those who have engaged the market.
The back to school strategies and the patience to prepare our Realtor referral partners for the “functional obsolescence” conversations are generating both listing opportunities and some refinances. Clearly a strategy that has made both referral partners happy with new opportunities!
Those originators who have invested their time and energy executing the small bank and credit union strategy are already seeing referrals on both bank turn downs and loans those institutions just don’t do! A very limited investment of time and effort fueling purchase referrals for those who chose to engage!
Another strong strategy has been to work those “Open Houses” and the surrounding neighbors. New listing opportunities, buyer opportunities, new listing opportunities, and even a handful of refinances are making a big difference in the bottom line. In fact, we are seeing record closings in August and scheduled closings for September for purchase, units, and dollar volumes! Some personal best individual months have helped fuel some branch bests, area records, and are helping exceed performance numbers for all of 2018 by the end of this month; so bravo to those who have made the effort.
We now have to continue with the ongoing plan and include our calls to our accountants and financial planners! September and October are ripe for these contacts and the execution of the plan to help generate these often overlooked opportunities! At the same time, the commitment to making those ten refinance opportunity calls three nights a week are driving some great numbers for refinances and listing opportunities for our referral partners!
Just keep working! We are heading for a huge finish to an already great year if we just keep executing!
I also want to take a minute and thank you all for your concern for me and my family here in Florida due to the potential impact of Dorian. We were spared major damage, but those in the Bahamas were not. Please remember those who have suffered a huge life altering event with your thoughts and deeds. For those who are still in the potential path of this storm, please take it seriously. While not the monster storm it once was, it can still take life, damage and destroy property! So please be careful and know me and my family are praying for you and yours!
As always, you can send your questions and comments to Mike@IMTcoacoaching.com