Have you ever finally tried some type of new technology product, immediately loved it, then wondered why you didn't try it sooner? Like Tivo, maybe, or Google's search engine? I can still remember my family's first microwave oven, and the wonder of being able to cook a frozen burrito in two minutes. The feeling of 'this is so cool!' is quickly replaced by a desire to kick oneself for living for so long in ignorance of what amounts to a 'better mousetrap'.
I can think of two excellent mortgage industry-specific examples. One is from the past and the other is quite current. In 1995, I took a job with Calyx Software when most brokers still didn't use a computer in any way. We had to 'sell' brokers on the idea of using a software program to generate forms and calculate payments, ratios, etc. People were used to typing (yes, with a rat-a-tat typewriter) the property address and loan amount on 40 different pieces of paper and just figured that was the way things would be forever. Hard to imagine working that way today though, eh? We look back on that time, and ask "Why would anyone resist a change that is so obviously beneficial in every way?'
I feel the same way about my second mortgage industry example now as I did back in 1995 about loan origination software. The example is electronic file storage, otherwise know as imaging. Originators can now store loan documents and files as digital images on secure web servers, and in doing so reduce costs, increase efficiency, and protect their borrowers from identity theft. It's such a win-win-win that I can only assume that those that haven't made the switch are either unaware of this new advancement, or are creatures of habit that wait for everyone else to try something first. For those that are interested in learning more about this 'no-brainer', however, here are some more details:
When you create an image of a document, you've now got a computerized version of that doc that can be viewed or printed at any time. If you image an entire loan file, you can save those images instead of the paper file, and still meet DRE requirements to retain files (three years in CA). So right there you're saving money by not having to store boxes and boxes of paper. If you're storing files off-site, these savings can be significant. But if you're simply scanning loan documents and saving them as PDF's on your computer's hard drive or even on a portable drive, you still don't have an imaging system.
Part of the beauty of the solution I'm talking about is the fact that loan files get stored securely on servers you can access from anywhere you can get on the internet. So when a past client calls and needs to refi ASAP, you'll be able to have the exact document you need in that file from two years ago in front of you in seconds. No matter where you are. That's efficiency. Or if your office gets broken into or flooded, or your computer crashes, your loan documents are all still safe. That's security. Even if you're already scanning documents but storing them yourself, you're missing out on these key benefits.
It's my guess - especially since originators need to cut costs now more than ever - that electronic file storage will be commonplace before too long. The sooner you check it out, the sooner you'll make the switch. After all, storing paper files these days makes as much sense as waiting 30 minutes to cook a frozen burrito!
If you're interested in learning more about my company's imaging system, called Trio, click here. You get to use it for the first two months for free, and I'll be happy to provide free training. And Trio is by far the lowest priced imaging system available, by the way. Check it out.
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See the list of upcoming training dates and time in the upper left of this blog- click on the session you want to register online, and if it's full contact me directly at jack_trageser@emagic.com to get in anyway.
Wednesday, April 23, 2008
Friday, April 11, 2008
Big things afoot at eMagic
Like anyone else working in the mortgage industry right now, I'm plenty happy just to be working in the mortgage industry right now. If you know what I mean. With the mortgage business down in so many ways, technology vendors that support mortgage companies are hurting as well. It's my good fortune, however, to be working for eMagic, the exception to that rule.
Not only is eMagic more popular with mortgage originators than ever before because we provide access to free DU and LP for numerous lenders. That's keeping me pretty busy all by itself. I'm training brokers in record numbers, and signing up new lenders left and right. But eMagic has become so much more than a DU/LP 'One Trick Pony,' and that's why I decided to start this blog. For the first time since 1998, when I was the head of business development and marketing at Calyx Software and POINT really started taking off, I'm getting that feeling again. I think eMagic can be the next big thing in technology for mortgage originators, and I want to chronicle its development. But this blog will be about much more than that.
I'll also use this as a forum to announce upcoming free training sessions, and share news tidbits and links I think originators will consider 'good stuff'" (see below for a sample). Finally, I'd like to receive and answer good questions about eMagic or broker technology in general- so feel free to post here.
Upcoming Training Sessions
April 24th at 10:30 AM PST- DU, LP, and Imaging in eMagic- Learn insider tips
May 9th at 10:00 AM PST- The Weakest Link- The Six traits of a successful salesperson
May 24 at 2:00 PM PST- Success Signals- Secrets to effective communication
June 3rd at 10:30 AM PST- Full Doc Processing
Send an e-mail to jack_trageser@emagic.com or brent_conrad@emagic.com if you'd like to attend any of these sessions- and watch this blog for additional sessions to be added. We'll be adding two additional DU/LP sessions in May, and new sessions on running FHA and VA loans through DU and LP, and document imaging and electronic document transfer.
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NEWS: Quick summaries of Mortgage Industry Trade Publications Articles
According to an article in American Banker published on April 1, loan servicers are actively working on ways to retain borrowers in anticipation of an expected refi wave due to a reduction in interest rates of 25 to 50 basis points by the Federal Reserve in the coming months. It's possible that originators will face more competition than ever from the current servicers, because, as an industry expert says in the article, "The ones (servicers) want to keep are the ones they're about to lose".
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U.S. Mortgage Bond Issuance Plunged in 1st Quarter
Reuters (04/01/08); Haviv, Julie
A new Thomson Financial survey shows that U.S. mortgage-backed securities (MBS) issuance plunged by more than 75 percent in the first three months of this year from the first quarter of 2007 amid ongoing uncertainty in the housing market. According to the report, MBS issuance totaled $61 billion in this year's first quarter, down substantially from $273.9 billion a year earlier. Richard Peterson, Thomson Financial's director of capital markets, notes that the January-through-March stretch marked the slowest quarter for issuance of U.S. MBS since 2000's fourth quarter. Meanwhile, issuance of bonds backed by firms other than Fannie Mae and Freddie Mac has come to a virtual stand-still as investors opt not to buy securities backed by loans where payments are not guaranteed.
http://www.reuters.com/article/telecomm/idUSN3157215620080401
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Mortgage Meltdown Maps Offered
Central Valley Business Times (CA) (04/02/08)
The Federal Reserve System has posted a set of dynamic maps and data on the Internet that shows subprime and alt-A mortgage conditions nationwide, including such information as share of loans in foreclosure, median combined loan-to-value ratio at origination and share of adjustable-rate mortgages with interest re-sets scheduled for the coming 12 months. To be updated on a monthly basis, the color-coded maps display regional variations in the condition of securitized, owner-occupied subprime and alt-A loans, with color intensity correlating to severity of the problem. According to the Fed, the maps and data can be used to help pinpoint existing and future foreclosure hotspots.
http://www.centralvalleybusinesstimes.com/stories/001/?ID=8307
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Please bookmark this blog (http://jacktrageser.blogspot.com/) and check back regularly for more Good Stuff for Mortgage Pros. Thanks!
Not only is eMagic more popular with mortgage originators than ever before because we provide access to free DU and LP for numerous lenders. That's keeping me pretty busy all by itself. I'm training brokers in record numbers, and signing up new lenders left and right. But eMagic has become so much more than a DU/LP 'One Trick Pony,' and that's why I decided to start this blog. For the first time since 1998, when I was the head of business development and marketing at Calyx Software and POINT really started taking off, I'm getting that feeling again. I think eMagic can be the next big thing in technology for mortgage originators, and I want to chronicle its development. But this blog will be about much more than that.
I'll also use this as a forum to announce upcoming free training sessions, and share news tidbits and links I think originators will consider 'good stuff'" (see below for a sample). Finally, I'd like to receive and answer good questions about eMagic or broker technology in general- so feel free to post here.
Upcoming Training Sessions
April 24th at 10:30 AM PST- DU, LP, and Imaging in eMagic- Learn insider tips
May 9th at 10:00 AM PST- The Weakest Link- The Six traits of a successful salesperson
May 24 at 2:00 PM PST- Success Signals- Secrets to effective communication
June 3rd at 10:30 AM PST- Full Doc Processing
Send an e-mail to jack_trageser@emagic.com or brent_conrad@emagic.com if you'd like to attend any of these sessions- and watch this blog for additional sessions to be added. We'll be adding two additional DU/LP sessions in May, and new sessions on running FHA and VA loans through DU and LP, and document imaging and electronic document transfer.
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
NEWS: Quick summaries of Mortgage Industry Trade Publications Articles
According to an article in American Banker published on April 1, loan servicers are actively working on ways to retain borrowers in anticipation of an expected refi wave due to a reduction in interest rates of 25 to 50 basis points by the Federal Reserve in the coming months. It's possible that originators will face more competition than ever from the current servicers, because, as an industry expert says in the article, "The ones (servicers) want to keep are the ones they're about to lose".
---------------------------------------------------------------------------------------------
U.S. Mortgage Bond Issuance Plunged in 1st Quarter
Reuters (04/01/08); Haviv, Julie
A new Thomson Financial survey shows that U.S. mortgage-backed securities (MBS) issuance plunged by more than 75 percent in the first three months of this year from the first quarter of 2007 amid ongoing uncertainty in the housing market. According to the report, MBS issuance totaled $61 billion in this year's first quarter, down substantially from $273.9 billion a year earlier. Richard Peterson, Thomson Financial's director of capital markets, notes that the January-through-March stretch marked the slowest quarter for issuance of U.S. MBS since 2000's fourth quarter. Meanwhile, issuance of bonds backed by firms other than Fannie Mae and Freddie Mac has come to a virtual stand-still as investors opt not to buy securities backed by loans where payments are not guaranteed.
http://www.reuters.com/article/telecomm/idUSN3157215620080401
-----------------------------------------------------------------------------------------------
Mortgage Meltdown Maps Offered
Central Valley Business Times (CA) (04/02/08)
The Federal Reserve System has posted a set of dynamic maps and data on the Internet that shows subprime and alt-A mortgage conditions nationwide, including such information as share of loans in foreclosure, median combined loan-to-value ratio at origination and share of adjustable-rate mortgages with interest re-sets scheduled for the coming 12 months. To be updated on a monthly basis, the color-coded maps display regional variations in the condition of securitized, owner-occupied subprime and alt-A loans, with color intensity correlating to severity of the problem. According to the Fed, the maps and data can be used to help pinpoint existing and future foreclosure hotspots.
http://www.centralvalleybusinesstimes.com/stories/001/?ID=8307
-------------------------------------------------------------------------------------------------
Please bookmark this blog (http://jacktrageser.blogspot.com/) and check back regularly for more Good Stuff for Mortgage Pros. Thanks!
Thursday, April 10, 2008
A good time to blog to mortgage originators
Today's insider news is very optimistic report about mortgage spreads and market reaction since the Feds avoided "financial disaster" by bailing out Bear Stearns. This is put out weekly by a reputable mortgage pipeline firm called Capital Markets Cooperative.
AN INSIDER'S VIEW FROM THE CAPITAL MARKETS COOPERATIVE TRADING DESK:
“Is the worst of the credit crisis behind us? Was Bear Stearns’ capitulation the last straw? It sure feels like it. The Fed has shown its willingness to prevent disaster. Voices from Merrill Lynch to S&P say that the worst losses have been taken. Credit spreads on everything from corporates to munis to mortgages are tightening. Banks are raising capital and the stock market is rallying. And if the mortgage-to-Treasury spread is any measure of the industry’s health, we’re on the way back in a big way.
Since March 6th, fixed mortgage rates have fallen a full 1.00% relative to Treasury yields. The spread between mortgage and Treasury yields, while still high at 2.55%, no longer reflects panic. In fact, we can almost say that current spreads are logical. They simply reflect high prepayment volatility, as we might expect with the Fed still slated to cut short-term rates by 0.50% over the next three months. Most traders think that spreads will not widen back to panic levels, but they will not collapse to 2004-2007 levels any time soon either.
So if there is at least a small chance that things are getting back to normal, where do we go from here? The National Bureau of Economic Research just published a paper that compares the current debt crisis with a long list of crises that have occurred around the world since World War II. The paper asks the age old question: Is this time different? As it turns out, this time is not so different after all. Similar banking crises have chopped 2% to 5% off of GDP, have produced mild inflation, have been resolved more quickly if the government gets involved, and have worked themselves out in two to four years. Sound familiar? The worst crises were all exacerbated by rigid government and banking policies. Japan had the scariest experience – the Japanese began their “lost decade” in 1992.
The Fed forecasts that Treasury yields will range between 3.50% and 5.00% over the next three years. If the Fed is correct, annual GDP growth will range from a low of 0% this year to a possible high of 3.2% next year. Inflation may surge to 2.8% this year, but is expected to drift lower over the next couple of years, with a low-end prediction of 1.5% in 2010. Fixed mortgage rates, therefore, should hover between 5.50% and 6.50% for the foreseeable future. That wouldn’t be so bad.
Amidst this talk of recovery, the yield curve has flattened, taking some of the enthusiasm out of the banking sector. The difference between two-year and ten-year Treasury yields peaked above 2.00% a few weeks ago. Last week it settled down at 1.60%.”
AN INSIDER'S VIEW FROM THE CAPITAL MARKETS COOPERATIVE TRADING DESK:
“Is the worst of the credit crisis behind us? Was Bear Stearns’ capitulation the last straw? It sure feels like it. The Fed has shown its willingness to prevent disaster. Voices from Merrill Lynch to S&P say that the worst losses have been taken. Credit spreads on everything from corporates to munis to mortgages are tightening. Banks are raising capital and the stock market is rallying. And if the mortgage-to-Treasury spread is any measure of the industry’s health, we’re on the way back in a big way.
Since March 6th, fixed mortgage rates have fallen a full 1.00% relative to Treasury yields. The spread between mortgage and Treasury yields, while still high at 2.55%, no longer reflects panic. In fact, we can almost say that current spreads are logical. They simply reflect high prepayment volatility, as we might expect with the Fed still slated to cut short-term rates by 0.50% over the next three months. Most traders think that spreads will not widen back to panic levels, but they will not collapse to 2004-2007 levels any time soon either.
So if there is at least a small chance that things are getting back to normal, where do we go from here? The National Bureau of Economic Research just published a paper that compares the current debt crisis with a long list of crises that have occurred around the world since World War II. The paper asks the age old question: Is this time different? As it turns out, this time is not so different after all. Similar banking crises have chopped 2% to 5% off of GDP, have produced mild inflation, have been resolved more quickly if the government gets involved, and have worked themselves out in two to four years. Sound familiar? The worst crises were all exacerbated by rigid government and banking policies. Japan had the scariest experience – the Japanese began their “lost decade” in 1992.
The Fed forecasts that Treasury yields will range between 3.50% and 5.00% over the next three years. If the Fed is correct, annual GDP growth will range from a low of 0% this year to a possible high of 3.2% next year. Inflation may surge to 2.8% this year, but is expected to drift lower over the next couple of years, with a low-end prediction of 1.5% in 2010. Fixed mortgage rates, therefore, should hover between 5.50% and 6.50% for the foreseeable future. That wouldn’t be so bad.
Amidst this talk of recovery, the yield curve has flattened, taking some of the enthusiasm out of the banking sector. The difference between two-year and ten-year Treasury yields peaked above 2.00% a few weeks ago. Last week it settled down at 1.60%.”
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