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3 Ways Mortgage Loan Officers Can Grow Leads Without Spending Money on Ads

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By Luke Shankula

The coronavirus pandemic has affected virtually every aspect of our daily lives, from schooling to socializing to business. Since lockdowns commenced nearly a year ago, I’ve had mortgage loan officers, long accustomed to building relationships and generating leads through in-person networking, asking me how they can generate new business.

Sure, spending money on advertising is one strategy. But in a brave new world where people are spending huge amounts of time online, my advice to loan officers is this: go social like you mean it. These are my top three ways that loan officers can grow leads organically—that is, without spending a dime.
  • Be strategic with social media engagement.
  • Create quality content that people want to consume.
  • Present yourself in a genuine manner—i.e., be the “real you.”

Choose your platforms strategically

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Image by nominalize from Pixabay

Unless you’ve got a monstrous amount of time to devote to social media or the budget to pay someone else to do it for you, it’s difficult to have a huge presence across several different platforms. Instead, I tell my clients to choose one, two, maybe three social media platforms, and get really good at using those. This comes down to researching which audiences you’ll reach on different platforms and honing in on those that can be the most fruitful. Here are just two examples of how I tell clients to use the many platforms out there:
  • LinkedIn: While LinkedIn isn’t exclusively a B2B platform, it is the place where you’re more likely to network with referral partners, such as real estate agents and other loan officers. It’s a great place for work-related content, but posting links to shared content will actually reduce your engagement here, since LinkedIn (and Facebook) wants to keep people in the site. Instead, create short, original posts that talk about your business. This doesn’t have to be “hard sell” stuff. Try posting video or screenshot testimonials from happy clients, or you celebrating closing a loan in record time. This is called “social proof”—it’s what establishes you as a leader in your field and attracts potential colleagues and referral partners. Also, be sure to congratulate colleagues who post about promotions or job change. But go beyond a simple “Well done!” with substantive, sincere praise. “Congratulations Jan! I’ve been following your career since we worked together at ___, and it’s no surprise you’ve been so successful.”
  • Facebook: If LinkedIn is your office, Facebook is your living room. Use your personal Facebook page—yep, that’s right; your personal page, as it’s amazingly difficult to generate organic traffic on a business page—to share your original content on mortgage news, career wins and challenges. Intersperse these with normal Facebook stuff, whether it’s family photos or funny animal videos. When you sprinkle in the work-related posts, always think about engagement: “The Fed is threatening to raise interest rates again: do you think it’s too soon for another rate hike?” Make your non-personal posts public so that they can be shared with anyone. Accept friend requests that don’t seem sketchy or stalkerish. And engage, engage, engage.

Create quality content

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Image by Gerd Altmann from Pixabay

I say it all the time and I’ll never stop saying it. When it comes to growing organic leads, it’s about quality, not quantity. Posting 60 pieces of shared content a day, regardless of the platform, is going to turn people off and make them reach for the dreaded “mute” button—and it might also get you flagged as a spammer. Instead, post original, quality, shareable content that people can use. Here are just a few ideas:
  • A short video (60-120 seconds is ideal) of you explaining how the mortgage pre-approval process works, or telling folks how they can improve their credit score
  • An attractive infographic showing the steps from loan application to closing
Remember, most first-time buyers—and a lot of second- or third-time buyers—have no clue how this stuff works. By creating content that explains the process, you establish yourself as an expert. Just don’t forget to add links to your email address and business website!

Just do you

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Image by mohamed Hassan from Pixabay

They say that all business is personal, and that’s truer now than ever before. There might have been a time when prospective loan applicants could choose from just a handful of loan officers. Now, there are more than 300,000 loan officers in the US, most of them reachable with the click of a mouse. So how do you stand out in a crowded field? Just by being you—and social media is the place to do it.
  • Be genuine. Share your kid’s stellar report card and your spouse’s new promotion just as readily as you do mortgage industry news. You’re a lot more than just your job, and your clients want to know that.
  • Engage actively, but naturally. Make a concerted effort to share and comment more on social, but don’t fake it. If you’re interested in a topic, try to generate lively discussion around it. If you’re happy for a friend or colleague’s positive news—express it!
  • I tell my colleagues to be themselves online and in-person, with one caveat: stay as apolitical as possible. Mortgage loans aren’t red or blue!
Building a social media presence that generates organic leads won’t happen overnight. It takes months, if not years, to create and curate quality content, build your followings and raise your profile. But when it all starts to click, it’s some of the most rewarding business you can land—and not just because it’s free. For loan officers, marketing and lead generation through social media enables you to really create a trusted brand. And the satisfaction of knowing you did it yourself, using your own initiative, creativity, and industry knowledge? That’s priceless.

How FHA Benefits Buyers, Sellers, and Brokers

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By Rick Tobin

Since 1934, FHA has insured over 34 million home mortgages nationwide. For buyers, sellers, and advising real estate brokers or other licensees, they should all learn more details about how the use of FHA mortgage loans can help each of them to buy and sell properties at potentially a faster and more profitable pace today.

Easier Mortgage Underwriting Guidelines for FHA Loans

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Because FHA mortgages are insured by the federal government in case of future default or foreclosure risks, mortgage lenders are more likely to offer much easier loan approval requirements for their interested borrowers. Let’s take a look below at some of the best FHA mortgage loan benefits that include:
  • Loan-to-value loan amounts up to 96.5% LTV for owner-occupied properties.
  • FICO credit score allowances as low as 580 for some lenders up to 96.5% LTV loans.
  • Sellers, family members, and other interested parties may be able to contribute up to 6% of the sales price towards closing costs, prepaid expenses, discount points, and other financing costs or concessions to greatly reduce total out-of-pocket cash contributions for the buyer.
  • Borrowers who invest at least 10% towards a down payment may qualify with a FICO credit score as low as 500 in some cases.
  • Debt-to-income (DTI) ratio limit allowances that may exceed 50% for borrower applicants.
  • Interest rates for FHA loans are usually priced at or better than the most attractive interest rates for loans that aren’t government-insured, which allows borrowers to qualify for much larger loan amounts.
  • Maximum loan amount limits for one unit ($765,600), two unit ($980,325), three unit ($1,184,925), and four unit ($1,472,550) properties are much higher now in 2020 than most people realize.

FHA Loan Amount Limits for 2020

Each year, the Federal Housing Finance Agency (FHFA), Federal Housing Administration (FHA), and the Department of Veteran Affairs (VA) revise their maximum loan limits for one-to-four unit residential properties by county regions across the nation.
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The FHFA establishes the baseline conforming loan limit that meets or “conforms” to certain qualifying underwriting guidelines that are established by the two largest secondary market investors or Government-Sponsored Entities (GSE’s) named Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation).
After a mortgage company, wholesale lender, or bank funds a loan, they usually need to sell it off into the secondary market to Fannie Mae, Freddie Mac, or to another secondary market investor so that the financial institution doesn’t run out of money. As a result, the lender will underwrite and approve borrower’s loan applications that both meet their own guidelines as well as the secondary market investor’s requirements. If not, the financial institution might be stuck with the funded loan, and will not be able to transfer it to another secondary market investor.
A conforming loan that is saleable or transferable to Fannie Mae or Freddie Mac and FHA loans are typically based upon median home prices in each county region. California, and other expensive states to live in that are typically near ocean locations or prime metropolitan regions, have “high-cost” county loan limits that can reach as high as 150% of the baseline mortgage limit that is derived from local median home prices in that same county region. FHA has a minimum loan amount or floor limits that go as low as $331,760 for a one-unit property (single-family home, condominium, townhome, etc.) as of January 2020. FHA has maximum loan amount limits that rise to as high as $765,600 in pricier county regions in California that include: * Alameda * Contra Costa * Los Angeles * Marin * San Benito * San Francisco * San Mateo * Santa Clara

Maximum Residential (One-to-Four Unit) Loan Limits in 2020

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For so long as the owner lives in one of the units for a duplex, triplex, or fourplex property, the same owner may qualify for the maximum residential LTV ranges just like he or she would for a single-family home. Many times, the adjacent tenant or tenants will pay enough in monthly rent to cover the owner’s monthly mortgage payment. Single (single-family home, condo, townhome) – $765,600 Duplex (two units) – $980,325 Triplex (three units) – $1,184,925 Fourplex (four units) – $1,472,550

Mortgage Insurance Premium (MIP) Fees

Because FHA mortgage loans tend to be at higher loan-to-value levels up to 96.5% LTV, these government-insured loans will include a mortgage insurance premium fee when the LTV exceeds 80% of the purchase price or appraised value for a refinance. The pooled insurance fee payments will act as future protection against any default risks. Generally, the MIP funding fee equals 1.75% of the loan amount that’s due at the time of closing. The official title for this MIP funding fee is the Upfront Mortgage Insurance Premium (UFMIP). Many times, the borrower can add this MIP finance charge to the loan amount if all underwriting guidelines are met and approved by the lender.
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Additionally, there will be an annual mortgage insurance premium (MIP) fee that varies depending upon factors such as the loan-to-value and loan amount size. Loans with a higher LTV range at 96.5% are generally considered much riskier than loans with lower 90% LTV ranges. As a result, the annual MIP fee percentage amounts will differ and range from a low of 80 basis points or .80% (at or below 90% LTV for loan amounts below $625,500) to as high as 105 basis points or 1.05% (at or above 95% LTV for loans greater than $625,500). Please note that 15-year FHA mortgages generally have lower interest rates and much lower annual MIP fees to as low as 45 basis points or .45%. Source: https://www.hud.gov/sites/documents/15-01MLATCH.PDF

FHA Monthly MIP Payment Example

Let’s quickly review a fictional $600,000 home purchase deal for a borrower who wants an FHA mortgage that’s fixed for 30 years with the lowest down payment possible:
  • Purchase price: $600,000
  • Maximum 96.5% LTV with just 3.5% down: $579,000
  • Upfront Mortgage Insurance Premium (UFMIP): $10,132.50 (1.75% of $579,000)
  • Annual MIP fee: $4,921.50 (.85% of $579,000)
  • Monthly MIP fee paid: $410.12 ($4,921.50 / 12 months)
The monthly MIP fee is paid in addition to the homeowner’s principal, interest, property taxes, and homeowners insurance. The faster that the homeowner can eliminate this monthly MIP fee requirement, the more affordable the future monthly payments will become for the borrower.

FHA Streamline Refinances

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Two or three years after buying a property with a 96.5% LTV FHA loan, a borrower may be able to qualify for the FHA Streamline refinance program if the new loan amount will be at 80% or below of the most recent estimated market value. Over the past several years, many homes have appreciated at 7% to 10% per year. If so, it may only take a few years for a property owner to reduce their LTV range from 96.5% with monthly MIP requirements to 80% LTV or below with no monthly MIP payments. Ironically, these “fast track” refinance programs may allow the borrower to not provide any formal documentation for their current income, credit scores, or even need a formal updated appraisal. If the monthly MIP payment can be eliminated with the new FHA Streamline loan, the borrower may also get a partial refund of their upfront MIP payment that was due at closing when the home was purchased.
A new FHA Streamline loan could save a borrower $500 to $1,000 per month, depending upon how much their interest rate is reduced, their loan amount, and whether or not their monthly insurance premium was eliminated.
Whether you are a buyer, seller, or a real estate broker, the FHA loan option might be the best financing option of them all for the parties involved. This is especially true as both the 30-year and 15-year fixed mortgage rates hover at or near all-time record lows!
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Rick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.

VA and FHA Mortgages & the Housing Boom (Part 2)

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Military Experience Eligibility for VA Loans

How does a retired or active military personnel member qualify for a VA loan based upon their military experience?

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* An earlier discharge date for a service-connected disability may still qualify you.
** Officers who separated from service after 10/16/81 may be eligible.

For more details, please visit The U.S. Department of Veteran Affairs’ website to learn about VA mortgage loan eligibility benefits:
https://www.va.gov/housing-assistance/home-loans/eligibility/

Once an active or retired military person meets the minimum qualifying guidelines, he or she will be given a Certificate of Eligibility that’s issued by the Department of Veteran Affairs. The VA mortgage loan applicant will then send a copy of the VA Certificate of Eligibility (VA Form 26-1880) to their mortgage broker or banker. For VA loan applicants who do not have a copy, they may complete a form entitled Request for a Certificate of Eligibility (Fillable) that’s linked here:
https://www.vba.va.gov/pubs/forms/VBA-26-1880-ARE.pdf

The Evolution of VA and FHA Loans

veterans-day-4653841_1280Near the end of World War II, the VA home loan program was created in 1944 as part of the original Servicemen’s Readjustment Act that’s also referred to as the GI Bill of Rights. The VA loan benefits were signed into law by President Franklin D. Roosevelt. A portion of each funded VA mortgage loan was guaranteed by the federal government in the event that the VA borrower later defaulted on the loan and lost the home in foreclosure. This way, each bank that funded the 100% loan for qualifying VA borrowers had much less financial risk.

Specifically, there were two types of government-backed or insured mortgage loans that stimulated the housing market and helped the U.S. economy prosper and rise up out of the previous negative Great Depression (1929 – 1939) years – VA and FHA (Federal Housing Administration) loans. These more flexible residential mortgage loans were part of President Roosevelt’s New Deal plan and the National Housing Act of 1934 that were designed to create more jobs and boost home values and the economy once again.

Since 1934, FHA has insured over 34 million home mortgages nationwide. As per the U.S. Department of Housing and Urban Development (HUD), FHA has active insurance on over 8 million single-family mortgages. In total for both residential and commercial real estate properties, FHA’s insurance portfolio exceeds $1.3 trillion.

To learn more about the Federal Housing Administration (FHA), please visit HUD’s website:
https://www.hud.gov/program_offices/housing/fhahistory#:~:text=Congress%20created%20the%20Federal%20Housing,workers%20had%20lost%20their%20jobs.

VA and FHA Loans for Buyers, Sellers, and Owners

calculator-723925_1280The main difference between FHA and VA is that the government insures a portion of the FHA loan while guaranteeing a portion of a funded VA loan. The vast majority of home loans funded nationwide over the past 10 years, directly or indirectly, were either government-backed (VA) or insured (FHA) and/or purchased in the secondary markets by other government-sponsored or federal entities named Fannie Mae, Freddie Mac, or Ginnie Mae.

FHA loans allow borrowers to qualify with 3.5% down on average (96.5% LTV) with lower FICO credit score options near 580 and easier overall underwriting allowances. FHA also allows seller credits and gifts from family members toward down payments that can effectively make a purchase loan become near 100% LTV also. However, borrowers will have to pay an additional monthly insurance premium along with their mortgage payment that can reach a few hundred dollars per month, depending upon the borrower’s FICO credit score, loan amount, debt-to-income (DTI) ratios, and LTV (loan-to-value). There are more flexible FHA Streamline refinance programs available as well that are similar to the VA Streamline.

For qualified VA borrowers, there is perhaps no better mortgage loan option available while FHA loans might be the second best option for high LTV loans. This is especially true as 30-year fixed mortgage rates continue to hover at or near all-time record lows while making many mortgage payments more affordable than rent even when the home is financed up to 100% of the purchase price.

To date, VA and FHA have guaranteed or insured over 58 million mortgages for homeowners. Home sellers should welcome any VA or FHA buyer prospect who has a pre-approval letter from a mortgage lender. This is because the lender is prepared to provide up to 96.5% LTV for FHA or up to 100% LTV for a VA loan. Amazingly, both FHA and VA loans can close in a few weeks or less due to expedited online application processing options.

 

Rick-Tobin-Professional-Pic-sharperRick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.

VA and FHA Mortgages & the Housing Boom (Part 1)

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By Rick Tobin

The most flexible and easiest qualifying mortgage loan product in America is the VA (US Department of Veteran Affairs) mortgage loan. Between 1944 and 1966, approximately 20% of all single-family homes built or purchased were financed by the VA home loan program for active military or retired veterans of World War II (1939 – 1945) or the Korean War (1950 – 1953). From 1944 through 1993, the VA mortgage loan program guaranteed almost 14 million home loans. By 2013, the VA had guaranteed over 20 million loans. As of 2019 in the VA’s 75th anniversary year, VA had surpassed 24 million loan guarantees for borrowers.

investment-4737118_1280Did you know that there are 100% LTV (loan-to-value) mortgage loans available to qualifying active or retired military personnel up to $1.5 million dollars for owner-occupied homes as of 2020? Yes, a qualifying VA mortgage applicant has the option to purchase a home priced as high as $1.5 million with no money down. These 100% LTV loans have no additional monthly mortgage insurance payment requirements like required for most other mortgages with a loan-to-value range above 80% of the purchase price or appraised value.

VA Loan Guidelines

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Mortgage loan underwriting guidelines are subject to change and may have some exception allowances for mortgage borrower applicants due to factors such as credit scores, income, job history, debt-to-income ratios, and property types. However, these are common VA loan terms or guidelines that were available as of June 2020:

  • No money down up to $1.5 million for owner-occupied borrowers (not second homes or investment properties)
  • Historically, a debt-to-income ratio of up to 41% DTI* was typical for VA borrowers. However, some VA loan programs allow up to 60% DTI or higher
  • No monthly mortgage insurance premium requirements
  • FICO credit scores as low as 620

* Debt-to-income ratio (DTI) = Borrower’s proposed mortgage payment plus monthly consumer debt obligations that are divided by monthly income. A borrower with $2,500 in monthly debt payments and $5,000 in monthly gross income (before taxes) will have a 50% debt-to-income ratio ($2,500 / $5,000 = 50%).

VA Loan Refinance

percent-226357_1280For existing VA mortgage borrowers under newer 2020 rules, VA borrowers can pull cash out of their property up to 100% of their property value. For example, a homeowner with an existing $250,000 mortgage loan secured by a property valued at $500,000 could apply for a new $500,000 cash-out loan that gets them upwards of $250,000 additional cash-out that they could use to pay off credit cards, student loans, automobile loans, business debts, or use the funds to make new property or stock investments.

A mortgage borrower in a non-VA loan can refinance from a conventional bank loan or an FHA loan with costly monthly insurance premium (MIP) payments into a new VA loan if one or more of the borrowers has VA eligibility.

Another easier qualifying VA refinance loan option is generally referred to as a “VA Streamline” (IRRRL – Interest Rate Reduction Refinance Loan). With some non-credit qualifying VA Streamline loan programs (subject to change), the borrower’s application process includes:

  • No minimum credit score
  • No appraisal required
  • Primary and non-owner occupied properties may be allowed
  • Must be current on existing mortgage loan about to be paid off
  • Manufactured homes attached to the foundation may be eligible

To learn more details about qualifying for VA refinance loans, here is a link to VA Pamphlet 26-7, Revised, Chapter 6: Refinancing Loans

https://www.benefits.va.gov/WARMS/docs/admin26/pamphlet/pam26_7/Chg_17_ch_5.pdf

 

Rick-Tobin-Professional-Pic-sharperRick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.

What’s Triggering Non-Performing Mortgage Loans In 2020

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By Fuquan Bilal

Deals on non-performing mortgage loans are in high demand. So, with the economy and housing market reportedly so strong, what might trigger mortgage defaults, and give note investors more assets to buy?

Being alert to these causes of default can give you the edge to see where things are headed, be able to get ahead of the competition, and work out notes, obtain deeds in lieu of foreclosure, or grant profitable short sales.

Rent Controls

Rent controls have long proven to be counterproductive. New sweeping rent controls in California and New York are only likely to prove the same. Investors have been buying up record amounts of property in the anticipation of bumping up rents, or flipping them to institutional investors for yields. Now those profits have been cut off. Lenders don’t want to loan on such deals, and those with commercial loans that are maturing could find themselves in trouble.

Consumer Debt

When regulators cut off the appeal and safety of making mortgage loans to retail home buyers, those with the capital found new ways to deploy their money. Consumer debt has been one of the biggest buckets. They have few rules in this space, and can charge so much more interest and fees. Then as usual, when people begin using these credit lines, creditors cut them off, sending credit scores diving and these borrowers into a downward spiral. That can also cut many homeowners off from home equity lines and prevent them from refinancing and tapping equity, even though they may have recently invested a lot of this credit in improving their homes.

Taxes

Some areas have been experiencing a whole new spree in taxes over the past few years. Look at NY. Following the cap on state and local tax deductions, they’ve been hit with online sales taxes, mansion taxes, new real estate transfer tax hikes, and higher annual property taxes. That could be just the tip of the iceberg depending on which way the election goes in November. Many people haven’t been prepared for all these tax hits.

Destruction Of The New Remote Working Economy

A new California law may have just put an end to the new freelance and remote working economy. The new law has given businesses the choice between treating freelance talent as full time in house employees, with all the risk and cost that brings, or to conduct mass layoffs. Most seem to be choosing the latter. Thousands of truck drivers could be out of work. Media companies are laying off hundreds of workers. Much of the California economy and tech industry have been relying on this type of talent to operate and make profits. Should this roll out to other states the impact will be even worse. Freelancing platform Upwork alone has some 12 million freelancers. As many as 60% of all workers in places like Brooklyn are believed to be remote workers. These workers have made unemployment numbers look low for years. If that type of employment is gone, what’s going to happen with a 60% unemployment rate? How about even a 16% unemployment rate? How are all of these people going to be able to pay their mortgages?

Failed New Construction Projects

In the long term we may still be far under the level of housing we need. Yet, builders have been focused on high end luxury product and smaller and smaller units. Thousands and thousands of these units squeezed into small urban areas are going unsold. Some have remained on the market for four years already. They are too expensive or just don’t fit what buyers are looking for. Sooner or later more of these developers are going to be foreclosed on.

Failed Investors

It’s been great to see the thousands of investors who have been inspired to get into real estate and mortgage debt over the past decade. Yet, many have been purely speculating. They are trying wholesaling, are bankrupting themselves on house flips without knowing what they are doing, or have bought into the pitch that it is only about cash flow. Many are only weeks away from broke. A couple of stalled closings and they are going to be in trouble.

As a forward thinking note investor, these are all huge opportunities to help others and make some great profits in the process.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Fuquan Bilal

Fuquan Bilal founded NNG in 2012 with the principal mission of capitalizing on the growing supply of mortgage notes in the interbank marketplace. Mr .Bilal utilizes his 17 years of residential and commercial real estate success to identify real estate opportunities and capitalize on them. To date, he has successfully managed three private mortgage note funds that primarily invest in singlefamily performing and non­performing mortgage notes. His financial acumen and proprietary set of investment criteria enable him to purchase underperforming real estate assets at a deep discount of face and market values, thereby increasing the value of the assets. This, coupled with his ability to maximize the use of leverage, enables him to build strong, secured portfolios with solid passive income flows.