After originating mortgages in California for 22 years, I returned to school and have now made the leap to an account manager position for White Ink Studio, a web design firm here in California.  One of the first things I recognized about my new field is how we might solve some of the business challenges of my previous field.

One of the first glaring opportunities I have uncovered is the major limitation now imposed upon Title Insurance Representatives here in California by the recently enacted Senate Bill 133.

The main thrust of SB133 is to license Title Representatives, and to reign in the practice of “buying” title business with offers of food, entertainment, office equipment, and other goodies.  I must admit I enjoyed the ball game, or concert tickets that I was plied with from time to time, but I really do agree that the selection of a title insurance vendor should be based on the needs of the consumer instead.

Title insurance is a critical requirement and major expense in most every real estate transaction in California yet buyers and sellers are usually happy to allow the Realtor or lender to select a Title Insurance Company for them.  This did create a scenario where the selection of a title insurance company may not have always been based on the best interests of the consumer.  All too often the perquisites offered to the agents involved by representatives of the major insurance vendors figured into the decision.  

Bill Fletcher is hunting for lazy websites!”   – I recently posted this statement on my Facebook profile.   The response was immediate.

“What the heck is a lazy website?”

I falsely assumed everyone would know exactly what I meant, forgetting that not everyone has  spent the last two years studying web development and design.  I thought for a minute about how to explain what a lazy website is in just a few words on Facebook.  I came up with this:  “A lazy website is one that costs you a little money rather than making you a lot of money.”

Ultimately, I could not do justice to a subject as diverse as next generation website design in a Facebook word bite.  To appreciate the next generation in web site capability you really have to look at what led to the sites most of us have currently.

The Internet was developed out of a need to facilitate the sharing of vast amounts of information among groups of researchers located in various locations.  Once the general public got a hold of it, we tried our best to turn this revolutionary life changing information engine into a colossal swap meet.  The rise and fall of this effort led to the infamous dot.com bubble we witnessed in the early part of this decade.

During the years since the bubble burst, several things happened:

1. Most of the “BuyMyTrinkets.com” operations have withered leaving only those with an actual viable e-commerce business plan.
2. Most businesses have gone ahead and put up a website anyway.
3. A vast majority of people now use the Internet regularly and can not imagine going back to life without it.

Even thought we business owners had witnessed firsthand the burst of the dot.com bubble, most of us knew we needed to have a website nonetheless.  We just weren’t sure what it was supposed to do.  We felt certain the first thing a prospective customer would do is check out our website to make sure we are legit.   To have no website was to risk failing that first test our prospects would put us too.  I still believe this may actually be true.

  

 

 

 

As many of you know, while Cindy has kept the wheels turning at Laguna Beach Mortgage, Bill has spent the last year studying and working to learn all of the many technologies behind the scenes in the exciting field of web marketing and development.  I continue to study because it is my ultimate goal to master the internet, and then invent the next big thing in social marketing, thereby becoming fabulously wealthy.  (I will invite you all to visit me on our private tropical island.)

 

My quest for mastery continues but I have reached a point where it is time to put my skills to work!  I have joined an advertising and web marketing agency that shares the same values that have always guided Cindy and me in whatever we do.  The firm is called White Ink Studio and represents a brand new alliance of seasoned veterans from the marketing, commercial design, and web development disciplines.   

 

My role with White Ink Studio will be to go out into the world and find lazy web sites so my colleagues Pete, Corey, and Jamie can do their magic and show the folks what is possible with the right team behind them.   

 

Many of you who I now count as friends started out as clients first.   I can not leave the mortgage industry after twenty two years without first letting you know how much I appreciate the blessing of your loyalty and support.   I welcome the opportunity to assist you in any way I can in my new capacity.

 

Sincerely,

Bill Fletcher 
White Ink Studio | P: 949.813.3861 | F: 949.544.0215 | E: Bill@WhiteInkStudio.com

 p.s. Cindy is still turning the wheels at Laguna Beach Mortgage and she would love to hear from you too!

If you follow real estate, politics, or life in general, you have probably heard about the latest effort to help support this vital market.  A new program launched on March 4th will offer help to many who have to who have not been able to take advantage of the low interest rate climate because they no longer have the required amount of equity in their property.  Although the program was launched effective immediately, most lenders are still trying to work out details of the implementation.  I have seen memos from some who expect to begin accepting applications  on April 4th.  Some of the details are likely to change between now and then but here are some of the guidelines as we know them.  There are actually two parts to the program.  the first part is a simple refinance of an existing FNMA program. For this program here is what we know:

I wrote an article a short while ago about whether or not it was a good time to buy a home. In that article I concluded that anytime is a good time to buy as long as you plan to hold the property for at least ten years.  My rationale in a nutshell is that over a ten year period you will have periods of strong gain and periods of correction but overall, at least here in California, it is hard to find a ten year span where properties are not worth more at the end of the span than at the beginning.  If you are going to experience up times and down times it does not matter so much when those times occur during your ten year span as long as you are up in the end.

I recognize that in spite of my words many will wait and try to time the market to get in at the very bottom. For those folks, I am posting this follow up to say that it appears here  in south Orange County, it may be time to make your move.   It is still a little early to pronounce the correction over but we are definitely seeing signs of support particularly for the entry level condo market.  A recent search of the entry level condo inventory has pointed out a few things of note.

I need to make this short so I can get it out quickly.  We have no time to lose.  In about 2003 I started to notice a drumbeat building among the talking heads on financial oriented cable news networks like CNBC and CNN.  Stock analysts would come on one after the other and forecast a huge housing bubble and insist that it was about to burst at any second.  For about two years there was no burst but the drumbeat got louder and louder.  Stock analyst after stock analyst would come on the screen and beat the drum. 

I am not going to pretend that the drumbeat actually caused the housing correction we are now in.  A correction almost always follows a long period of expansion in any market.  I am absolutely convinced however that this concerted campaign by the financial “talking heads” served to build a sense of anxiety and greatly amplify the inevitable correction. They continue to do something similar with the subprime loan problems, to the point where they are now feeding off each other and  jeopardizing the fundamental strength of our national economy. 

I admit this is old news. Cable News will certainly deny any role in the situation we find ourselves in. There is really nothing we can do to change what happened anyway.  The only reason I bring it up is that they are doing it again.

Over the past several days I have observed a string of “financial experts” beating the drum and predicting the seemingly inevitable failure of Fannie Mae and Freddie Mac.  We can’t let them do it again!

Look, I don’t know what possible motivation they had for campaigning for the destruction of the housing market.  Perhaps they watched as capital flowed out of the stock market into real estate when the last stock market bubble occurred.  Perhaps they felt the capital would flee real estate and flow back into stocks.   I don’t know but I am sure they did not expect their hype to cause so many brokerage houses to go down with the housing market.  They can’t be very happy with the way this has turned out for them either.

I wonder if they understand the ramifications of talking Fannie Mae and Freddie out of business.  Fannie and Freddie, and FHA are just about the only game in town right now for all loans up to about $700,000 in this country.  The analysts that I heard this morning seemed to suggest that in spite of encouraging words from management it was only a matter of time before they failed.  They went on to suggest that it was not fair to tax payers to have to provide assistance.  This leads me to believe the “financial experts” believe it would be cheaper for us to simply kill them off. 

Once again I don’t think they would be very happy with the outcome that they are campaigning for.   Without Fannie, Freddie, and FHA, the ability to finance a home purchase in this country would be pretty close to zilch.  FHA can’t handle the load alone. 

In order for an asset to have value it must be able to be bought and sold.  Without the ability to finance the purchase of your home, along with all the others, your home would have little value.   If Fannie and Freddie were to be allowed to fail, the results will be painful whether you own a home or not.

The effect of the media campaign is already being felt.  FNMA and FHLMC stock has traded sharply lower in eight of the nine trading sessions as the drum beat gets louder.  They need your help before it’s too late.  

·          First, I need you to spread the word to everyone you know.  Particularly if you are involved in the housing industry in some way, forward this information to everyone who cares about housing.

·          Contact your elected officials and the media.

·          If you are involved in the housing industry in any way, I strongly suggest that you show your support for Fannie and Freddie and buy stock.  Buy as much as you can afford.  Consider it an investment in our livelihood.

 

This country simply can’t afford to let the talking heads kill Fannie and Freddie.  Hey thanks for listening.

 

If you want a laugh check out some of these sites that showcase the worst MLS listing photos from across the Internet.

http://therealestatebakery.com/category/worst-mls-photos/

http://www.orlandorealestatephotography.com/bad_mls/bad_mls.html

http://www.orlandorealestatephotography.com/bad_mls/bad_mls.html

If you are a Real Estate Agent and you live in fear that some of your photos may end up featured on a site like these, you may want to visit one of the many sites like these.

http://www.37signals.com/svn/posts/356-real-estate-photos-worth-more-than-a-thousand-words

http://www.mlsphotograph.com/

If you try all of the tips and techniques and still find that your MLS listing photos could use some help, please check out the folks at Mio at this link.

http://LightBrightListings.com

They will lighten, brighten, straighten, and sharpen your real estate photographs. They operate by email and are fast and reasonable.

Happy Shooting!

Bill

I am reading the writing on the walls and coming to the conclusion that the days of the Mortgage Broker are probably numbered.  Bank of America cut off their wholesale division awhile back, and since they now own Countrywide, I believe the Countrywide wholesale operation will soon follow suit.  Once that happens I believe lender wholesale divisions will fall like dominoes. 

Maybe it is a good thing in the long run.  As long as Congress and the public at large are of the mind that unscrupulous brokers caused the mortgage crisis, eliminating brokers may be the only way to restore some confidence in the mortgage market.  Restoring confidence in the mortgage market is crucial for everyone’s sake

If you have read my previous blog entries you will know that I don’t really believe that Mortgage Brokers are as much to blame as the Wall Street Investment Houses who invented loan programs that required virtually no strength whatsoever on the part of borrowers.

As long as public perception is what it is,  upper management at Mortgage Banks will be able to cut off mortgage brokers and then turn to their shareholders, and the public at large, and announce they have fixed the problem.  Soon after closing down wholesale divisions, upper management will realize the same kind of “problematic” lending practices exist in their own retail lending divisions as well.  Retail loan officers will be the next to go. 

Washington Mutual has already closed standalone retail lending offices, along with their wholesale division. Washington Mutual has apparently chosen instead to handle mortgage applications via general purpose branch personnel.  I believe upper management at most mortgage lenders tend to view mortgages as a product rather than a process so I foresee that they will ultimately attempt to “sell” mortgages on line and eliminate local loan origination personnel altogether.

I feel bad for all the honorable Mortgage Brokers out there, and there are many.  I feel bad for the borrower because they will lose access to the valuable knowlege and service that a good broker provides.  I see borrowers in the future going from lender to lender trying to find one who will qualify them for the loan they need.  They will probably have to start from scratch with each new lender.

I feel bad for Realtors too because a trusted mortgage professional provides invaluable service before, during, and after the real estate transaction.  I interviewed with a high profile Internet lender awhile back.  The first thing that struck me was the job description stated “no mortgage experience required!”  During the interview, I asked how they handle the pre-approvals of clients for Realtors.  The interviewing manager responded that they “discourage their employees from wasting time with those.”

As for me,  I am  an ex-mortgage broker now. I don’t want to end up like the guy who used to deliver ice for your ice box after the refrigerator was invented, so I am working on something new.  I am  back in school to retrain myself in all of the technology involved behind the scenes in Internet marketing. 

One of the first things I learned was how important digital images will be in marketing real estate, or anything else for that matter, over the Internet.  With gas approaching $5 a gallon, more and more buyers will narrow thier search by reviewing listings on line before they jump in the car to go visit homes.  Listing photos will be relied on more heavily than ever to make the all important first impression.

I have developed processes specifically geared toward improving the digital photographs Realtors obtain of their listings.  We have developed processes to lighten, brighten, straighten, and sharpen the digital images of your homes when they are listed for sale.   

This week we launched, Mio -Marketing Image Optimization.  We can fix your listing pics!  We would love for you visit our web site and let us know what you think.

http://www.lightbrightlistings.com

I believe the best answer to both of these questions is “ten years.”  If this doesn’t really sound like a valid answer for the above questions, please bear with me for a minute and I’ll explain what I mean.

For my answer to make any sense I must explain the context in which I view the questions. I am a believer in owning real estate.  I have been buying property since 1978, and my wife and I have owned over 22 homes since then.  I have been taking loan applications and analyzing people’s financial strength for over 22 years.  It has proven to be true over and over again, with very few exceptions that the only significant wealth that most of us Southern Californians have is the equity in our real estate.  Beyond the equity in our homes most of us seem to have about the same amount in our bank accounts as we owe to our creditors. 

 

If you are mentally adding up the balances in your IRAs and 401ks and you are coming up with ten grand more than you owe on the wave runners in the garage then congratulations, but what I am referring to is significant wealth.  In my experiance significant wealth just about always seems to require owning at least one piece of real estate.

 

Here in Southern California many of us have become self employed in some sort of entrepreneurial career in order to manage to keep up with the cost of living.  As such we have no pension to look forward too. If you are in that boat with me, accumulating a little wealth is not just about affording the finer things in life, it is more about being able to retire someday. 

 

When I came to this realization a few years ago, I did a little research about ways to retire.  I have a file cabinet full of loan applications that I had taken over my career so I pulled out the applications for all borrowers who had managed to put themselves into a position to be able to retire.  I separated the files into stacks based on how they had achieved this feat.  I ended up with four piles.

 

One pile was full of doctors and lawyers who had earned so much over their careers that as long as they had invested in something, they did pretty well.  The next stack was made up of borrowers who had built up businesses, usually large ones with lots of employees. When the time comes, they sell the business and sail off into the sunset.  The third stack was made up of folks who had gotten lucky.  They had been in the right place at the right time.  One couple hit the lottery. Another man swept the floors at Apple Computer back when they had to pay people in Apple stock.  A few folks had done well investing in other things.  By far the tallest stack though belonged to those who had simply owned their home and then acquired another property or two along the way. 

 

By the time I did this analysis it was far too late for me to become a Doctor or a Lawyer. I really did not have it in me to try to grow a large company with lots of employees either. I could not see leaving it up to the fate to put me in the right place at the right time.  Owning a few properties seemed like the most reliable and do-able of the options.

 

So again, I firmly believe owning real estate is the very best way for us here in Southern California to reliably build a little wealth and to be able to retire someday. OK!  I told you that story so I could tell you this story.

 

Here is where I tie the questions to my answer.

 

Buying real estate now is the most reliable way I know to build wealth, and be able to retire, but you must give it ten years!

   

Real estate investing was never meant to be a get rich quick scheme even though it can be at times.  You would be very hard pressed to find a ten year time span where California real estate was worth more at the beginning than at the end. 

 

“Ok Bill I see your point and I am ready to buy but what if real estate values drop even more?” “Won’t I do even better if I wait for the bottom?”  Maybe, but….  how accurate is your crystal ball.  I can assure you of one thing. There are a ton of people waiting to buy “just as soon as the market hits bottom.” The challenge is that none of them will know when we have hit bottom until we are at least 3 months beyond it.    I predict that the vast majority of market timers will miss the bottom by 3-5% in terms of home values.  I predict that those buyers who do nail the bottom will be the ones who are not even trying to time the bottom. 

 

If most buyers are actually going to miss the bottom by 3-5% anyway, I contend that the buyers who buy 3% before the bottom will end up with the better homes. Buyers today have more choices than I can remember in the last 10 years.  Once we recognize the bottom it becomes a bit like the game “musical chairs.”  Once the music stops it may be all you can do to grab the nearest chair.  Worse yet is some folks will wait for the market to bottom only to find the loan program they needed to qualify has just been discontinued.  I’ll write more about that in my next article.

 

I had to learn all of this the hard way at the end of the last market correction in 1996.  I missed the bottom by about 3% and I kicked myself for a long time. Then I learned that it is all relative. Ten years later when my home had more than doubled in value what started as 3% of the initial home value was now more like 1% of my current home value and I rarely ever fretted about it anymore.

 

So back to our original question, has the Southern California real estate market bottomed out?  Is now the time to buy a home?   My answer is as long as you plan to keep the home for “ten years,” the sooner your ten years begins, the sooner your ten years will be up, and the sooner you will be on the road to significant wealth! 

 

We have now officially received our first rate sheet to be released under the new Fannie Mae/ Freddie Mac Jumbo conforming program.  If you have been following my posts here you already know that they were not going to simply open up the existing conforming interest rates for Jumbo loan amounts. the question we have been waiting to answer was would the “new” Jumbo loans be any lower than the “old” Jumbo loans?

 It does appear that the new conforming Jumbo rates will start out tracking at about half way between the traditional conforming rates and the current Jumbo rates.  According to the only rate sheet I have seen so far to include the new program.  The spread between the “old” conforming and the old Jumbo loans has been running a full percentage point and more.  As of our very first peek at the new FNMA jumbo pricing, it is priced about a half percent above the traditional conforming, and a half percent below the traditional Jumbo rates.  

www.LagunaBeachMortgage.com