to its May level, while the component gauging sales expectations in the next six months rose seven points to 22, which is where it stood in April. The component gauging traffic of prospective buyers held even with the previous month, at 12. Regionally, the HMI inched up one point to 12 in the Midwest and posted three-point gains in both the South and West, to 17 and 14, respectively. Only the Northeast posted a decline, slipping two points to 15.
George Washington University Report Finds FHA Loan Limits Exceed Necessary Level for Intended Audience
isfy its target market. That would reduce its currently large market share, which is difficult for FHA to manage.” The report analyzes the size of FHA’s target audiences to determine appropriate limits. It concludes that an FHA limit of $350,000 in the high-cost markets and a limit of $200,000 in the lowest cost markets is sufficient to satisfy more than 95 percent of FHA’s target constituency. Additionally, the report finds that the Administration’s proposed reductions in loan limits would affect only three percent of loans endorsed in calendar year 2010.
Bankrate Finds Closing Costs Averaging 8.8 Percent Higher Than One A study released Year Ago With New York b y G e o r g e Leading the Pack Nationwide, the average origination and title fees on a $200,000 mortgage are approximately $4,070, 8.8 percent higher than just one year ago, according to Bankrate Inc.’s 2011 Closing Costs Survey. New York leads the nation with an average fee of $6,183. Texas, Utah, San Francisco and Idaho round out the five most expensive areas. Arkansas is the least expensive area, with an average fee of $3,378. Most of the rise in closing costs is tied to fees charged directly by lenders. On average, lenders charge about $1,614 in origination fees this year, up 10.3 percent from last year. Origination fees include lender charges for services, such as underwriting and processing. “Interest rates get a lot of attention, and rightfully so, but it’s also important for consumers to compare lender fees when shopping for a loan,” said Greg McBride, CFA, senior financial analyst for Bankrate. Bankrate surveyed up to 10 lenders in each state in June 2011 and obtained online Good Faith Estimates (GFEs) for a $200,000 mortgage to buy a single-family home with a 20 percent downpayment. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and title insurance. The survey excludes taxes, property insurance, association fees, interest and other prepaid items.
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H
ow often do you rely on methods in your business instead of methodologies? It’s probably more often than you think. As the
leading mortgage marketing company in the United States – and one of the Top 500 Fastest Growing Companies in the nation – LoyaltyExpress thrives on the ability to consistently identify methods of behavior and actions that hold back loan officers, banks, and mortgage companies from realizing true performance and success – and establishing methodologies for improvement. But unless you recognize the difference, you might just assume what you’re doing is helping (rather than hurting) the overall production rate of closed loans for you and your organization. Let’s take a closer look at what this means.
A method systematically details a given procedure or process that has become a habit or periodic practice at work. You can think of it, for example, as the times or moments when you realize that important relationships in your network have been neglected (and that some type of action is needed). So, you might block off a day or a few hours to generate a marketing flyer – or place a request with an agency or department for assistance – in order to re-engage past customers, partners, and prospects. The process that I’ve just described is a common example
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of a method that allows mortgage professionals to periodically satisfy recurring business objectives by reacting to them. Unfortunately, such methods are highly inefficient and ineffective.
Here’s why: methods interrupt the natural flow of business and require steady distractions and inadequate usages of time. Take a look at the top-producing loan officers and organizations in the mortgage industry – they have a couple things in common: methodologies & success. By definition, a methodology is the construction of a framework that consistently manages and automates recurring requirements and best practices of an organization. And when it comes to marketing and the ever-competitive environment to retain loyal customers and partners – you’ll fall short without fundamental methodologies in place.
If you’d like to learn more about our unprecedented success and cost-effective approach to establishing high-impact mortgage-marketing methodologies, give us a call (877.938.1175) or send an e-mail to start@loyaltyexpress.com. The year is more than half way over – and it’s a great time to get back to basics and realize improvements. You’ll be glad you did.
LoyaltyExpress customizes, automates and manages retention marketing programs that yield extraordinary value. For more information: call 877.938.1175 or visit www.loyaltyexpress.com.
AUGUST 2011
The Financial Crimes Enforcement Network (FinCEN) has reported that the number of mortgage fraud suspicious activity reports (SARs) rose to 25,485 up 31 percent from 19,420 in the first quarter of 2010, according to its latest in its First Quarter 2011 Mortgage Loan Fraud (MLF) analysis. FinCEN attributes the increase to large mortgage lenders conducting additional reviews after receiving demands to repurchase poorly perform-
by Mary Beth Doyle, Founder
OHIO MORTGAGE PROFESSIONAL MAGAZINE
FinCEN Reports 31 Percent Year-Over-Year Rise in Mortgage Fraud
Shifting from Methods to Methodologies
NationalMortgageProfessional.com
Washington University, “FHA Assessment Report: The Role and Reform of the Federal Housing Administration in a Recovering U. S. Housing Market,” reveals that the Federal Housing Administration’s (FHA) current loan limits are larger than necessary to serve its targeted market of first-time and low- to moderate-income borrowers. The study finds that the Obama Administration’s proposal to reduce the higher end of FHA’s loan limits would have a small impact on its current market share and that larger changes are needed as FHA phases out its recent role as lender of last resort. The report concludes that the FHA still could serve 95 percent of its historic targeted market even if the maximum FHA loan limits were reduced by nearly 50 percent. To serve its target population, the report concludes that FHA only needs a market share of somewhere between nine to 15 percent of total mortgage originations. Current estimates by the Administration put its market share at approximately 30 percent of originations. “FHA’s expansion played a major role in keeping the housing market afloat during the economic collapse of 2008 and 2009,” said Dr. Robert Van Order, co-author of the report. “However, we now are left with large loan limits that were set when home prices at the top of the bubble. They don’t reflect current market conditions and are unlikely to assist the FHA in reaching its historical constituencies—first-time, minority and low-income homebuyers.” FHA’s loan limits have risen rapidly since the credit crunch began. In 2006, the FHA could insure loans of up to $362,790 in the higher cost markets. In response to the 2008 housing crisis, FHA loan limits were revised to insure loans of up to $729,750 in these high cost markets. Recently, the Obama Administration has proposed allowing current law to lapse in October, causing a modest decrease in these limits to $629,500. “We find that FHA’s current market share exceeds what is needed to serve these markets,” said Dr. Van Order. “In the wake of significant declines in home prices, we believe the FHA could reduce its loan limits by approximately 50 percent and still almost entirely sat-
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