Wednesday, August 25, 2010

Matchbox Top 10

As a followup to one of our blogs a few weeks back...

Since David Letterman and SportsCenter have found their groove with a daily Top 10, here's my attempt. With HR 5981 passing through Congress with an effective date now set for October (originally September 7) all lenders will need to update their process flow for all FHA loans.

UFMIP and annual premiums will be updated in just over a month. What's your next move? Here's our Top 10:
1. Updating your LOS (using its full potential) SO IMPORTANT!
2. Training for all staff members - not just sales
3. New QC review protocol - LIMIT YOUR RISK
4. Updating disclosures
5. Informing clients
6. Book a trip to Vegas...ok I'm just making sure you're still paying attention
7. GFE, closing costs and re-disclosing
8. Effects on purchase business
9. Case number expirations and transfers
10. And don't forget integrating accounting, remittance, and servicing

I know, it's not the sexiest laundry list but taking care of these updates swiftly and smoothly is extremely important.

Friday, August 6, 2010

HUD Raising MIP

As expected, with the passage of the HUD reform bill (HR 5981) by Congress two weeks ago, HUD recently announced they are lowering UFMIP to 1.00% and raising MIP to 85 – 90 bps from 50-55 bps (depending on the LTV). The bill gives HUD the authority to raise the MIP to 1.55 bps but indications are they have no intention (at least not yet) of requiring the maximum allowed.

This will lead to payment changes for the borrower. In short, the qualification process becomes slightly more challenging based on DTI, but not significantly. A lowered rate by 1/4% will overcome the difference created by the increase in MIP.

This change is expected to be effective for case numbers obtained on Sept 7, 2010 and thereafter. This could lead to a slight rush in case numbers ordered prior...

Very important to be mindful of the calendar!!!

Tuesday, August 3, 2010

Your LOS & Your Brain

I recent discussions I've begun to make analogies between an LOS and the brain. We use both for all memory/data storage, processing of information, recording thoughts, and executing daily functions. Also, just like the brain I'm pretty confident most lenders use only about 10% of their LOS's capability. To maximize potential both the LOS and the brain must be used and trained correctly; it's a learning process which takes time.

So many lenders struggle with researching and deciding on a preferred LOS but then barely use most of the value added services they offer. Why struggle with deciding whether or not to buy an iPad to eventually just use it as a digital picture frame? Some of the most important and impressive technological features of these systems go unused.

A good LOS had the ability to:
-Improve client retention
-Integrate and track lead flow
-Safeguard policy and program guidelines
-Ensure compliance
-Streamline data and process flow
-Improve oversight and accountability
-Reconcile profitability
-Alleviate data integrity concerns
-Offer detailed reporting and pipeline management

How effectively and efficiently are you managing your pipeline and business flow?

How effectively and efficiently are your using your "brain"?