Home Financing Ninja

RESPA: Section 8 - Builders Requiring the Use of the In House Mortgage Company - A Counter Point to A Counter Point

In the past two days, there have been a few articles about RESPA Section 8 - Required Use Rule as it relates to builders and the builders in house mortgage company.

Let's get ready to ruuummmmmbbbbblleeeeeeeeeeeeeeee ...... (Cue upbeat music)

In the left corner is Ed Gillespie and his article (rant) about what I believe is a personal experience.

From his article "Do I really have to use the Seller's Lender?" (12/24/10), here are the summary points, I believe

1. To get certain sales incentives, you have to use the in house lender (ANSWER: NO, one can use any lender they want)
2. To get a home in a certain subdivision, you have to use a certain in house lender (ANSWER: NO)
3. To put a contract on a home, you have to get prequalified with a certain in house lender (ANSWER, Absolutely not)

In the right corner, is everyone's favorite Maryland and Virginia Real Estate Broker, Lenn Harley.  Her article (one day later) "Can or Should New Home Builders Require or Be Permitted to Require the Use of Their In House Lender or Approved Lender ... " (12/26/10).  Lenn debates the fact of Ed not having the proper citations on his writing, but in fact provides the actual citation that Ed was referring to

Section 8, Paragragh C, Sub paragraph 4 (Sec 8 (c)(4) )
"The consumer is not required to use a particular settlement service provider"

It is clear that in Ed's case, this happened to him and he wound up losing a deal because of the end user's lack of education.

The Active Rain confirmed loan officer program (group) recently conducted an interview with Dr Gary Lacefield.  Dr. Lacefield is the president of the Texas firm, Risk Mitigation.  He consults companies on proper RESPA procedures and serves as an expert witness in criminal and civil trials.  Dr. Lacefield was presented this EXACT scenario and agreed, this is clearly a violation of the Required Use Rule. (Oh, and did I mention that Dr. Lacefield used to be the senior HUD investigator for the Texas region?)

Here is what I found on the Federal Register about this subject:

Required use means a situation in which a person's access to some distinct service, property, discount, rebate, or other economic incentive, or the person's ability to avoid an economic disincentive or penalty, is contingent upon the person using or failing to use a referred provider of settlement services. In order to qualify for the affiliated business exemption under § 3500.15, a settlement service provider may offer a combination of bona fide settlement services at a total price (net of the value of the associated discount, rebate, or other economic incentive) lower than the sum of the market prices of the individual settlement services and will not be found to have required the use of the settlement service providers as long as: (1) The use of any such combination is optional to the purchaser; and (2) the lower price for the combination is not made up by higher costs elsewhere in the settlement process. (See 73 FR 68239-68240)

I agree with Lenn's point about there being some good with the builder having a bit of control over the choice of lenders in order to get the homes built and sales closed.   However, I do not agree with the point she tries to make about efficiency (such as working with 50 different lenders on 50 different lots) nor do I agree that the "lender has been vetted by the builder."  In my area, most builders have either reps of the major locals banks that they have done business with or they (the builders) have their own lending arm.  In all instances, we all know that these lenders make compensation by SRP (service release premiums) that can go unchecked (unregulated.)

So in the spirit of the law, I should be allowed as a consumer to shop for better deals, yet still be able to get all the "perks" that the builder is offering regardless of which lender I choose.  In my particular case, i know that I was givien the highest possible rate, allowing my loan person (a CBA of my builder) to get the highest possible compensation.  THIS IS WHAT IS ILLEGAL AND HAS TO STOP.

Loan Officers, Mortgage People Unite - Start calling HUD and start educating Realtors and Builders.  And remember, the majority of RESPA complaints come from other real estate industry professionals that you work with every single day!!!

Comments, let me hear you.  I will also see what I can do about getting Dr. Lacefield back for a follow up interview!!!

Recycle a Christmas Tree, Tampa Florida - Easton Park

The big day is over. We have dumped out our stockings, opened presents, eaten the big dinner and even washed and put away dishes.

Soon will come the time to take down the lights on your house and tear down the Christmas Tree.

If you have a live Christmas tree, here are some simple tips on how to Recycle a Christmas Tree, Tampa Florida - Easton Park

(Courtesy of Tampa.gov)

Christmas Tree Recycling in Tampa, Florida will start on January 3rd and continue to January 7th, 2011.

All Christmas Trees must be free of tinsel and ornaments and placed curbside on the day the yard waste is collected

If you miss the pickup, you can take your tree to one of two stations that offer free Christmas Tree Disposal in Tampa, Florida.  To use either of the two sites, you must have documentation proving residency in Hillsborough county, such as a Drivers License and a current city of Tampa utility bill. 

One station is the Manhattan Brush Site, Tampa, Florida. 

View Larger Map

The second location is McKay Bay Transfer Station, Tampa, Florida.

View Larger Map 

Now if you are ready to stop renting and purchase a home in Tampa, Florida in 2011, the first step is to get properly approved and qualified financially. All credit issues, including past bankruptcy and foreclosure accepted.

Stop wasting your hard earned money on your landlord's retirement and buy a home in Tampa, Florida that is customized to yur dreams today.

The Great Debate: Discounting Commission and Building a Niche, Part Two - Plant City, Florida

Yesterday in Part one on my three part series about the Debate of Discounting Commission in Plant City, FLorida, I spoke about what I thought was the basic reasonings (arguments) of the whole discounting commission debate.  As I mentioned, it seems to be a hotly contested debate.  Some people would not do it whatsoever, others might.

To them I would say, 6 bilion coupons users, cant be wrong.  Look at Groupon.com - They have 34 million opt-in's

I did some more thinking about this, especially after doing some review about discount brokerages and Redfin.  I remember starting to read that thread a few months ago.

Let me first warn you, this is NOT Redfin.  I am not suggesting to any real estate agent that they rebate a full one percent or greater of their commission, especially if they work for a larger brokerage who is already getting part of the commissioned fees.  The highest my model will discount is $10,200 (based on a $1M listing (both buyer and selling)and a three percent commission).  Nor do I claim to know everything.  All I am giving is food for thought of something that is working for me.

Yesterday I parted with a question that after 40 view and 30 clicks, no one else seemed to dare answer (Maybe they did not get that far down in the article).  So I am going to ask it again

Would you as a realtor or loan officer being willing to give up 17% of your commission if your local insurance agent (or CPA, or divorce attorney, or Financial Planner or Title Company) that you do business with came to you with their entire database for you to market to?

Let me ask another way.  If I called you and handed you a lead with a stipulation of 17% referral fee to be paid directly to the client? (Don't try to lie, you know that you would JUMP at the chance)

Today, I will give your some pointers on database building with this concept, Discounting Your Commission - Plant City, Florida.  It is my belief that he (or she) who has the biggest database will win (as long as your are consistently following up with that database)

Would you rather want to market to a 5000 person database or to Ten 500 person databases.  It would be much quicker to do the latter, rather than build, develop, and cultivate to 5K members.

One important factor that this business model must have is being able to invite other professionals into and marketing to their databases.  Now I am not referring to the whole discount argument.  There are a surprising number of agents and professionals (insurance, stagers, mortgage, warranty, etc) that do not do this.  Do a joint video with your favorite professional with a call to action of visiting each other for thier needs.  (Such as an insurance person telling to visit the realtor for all the specific needs a realtor can fill and a realtor telling thier database to check out the insurance person - You are smart, I am sure you understand what I am saying)  This can also be done in the community with a local HOA board president, PTA person or principal for your local school, or an elected official.  Key Point Have the other person send the video / email out to their database since you are going to send it out to yours

My favorite is the local fitness center.  I offer coupons and leave a letter for members of the local fitness center and I send that same coupon (as determined by the fitness center) to my database also

This same idea can be done with other professionals - Professionals are defined as the following: Tax Preparers, Attorneys, Financial Planners, CPAs, Tax Attorneys, Bankruptcy Attorneys, Realtors, Mortgage

Others to include would be the AVON lady down the street (or any other similar type).  Your own nieghborhood and those nieghborhoods of the partners (listed above)

Now Here is where it gets fun - Offer this to a certain niche.  A local city (see Plant City Home Benefits - Plant City, Florida), the military, a certain military base (if there is one close to you that you can visit) your city's hometown heros (police, fire, first reponders). 

Most of us are members of the local chambers of commerce, BNI, Kiwanis, etc. Last but not least however, don't forget the employers in your city or state. Offer this as a Corporate Real Estate and Mortgage Benefit to your local employer.  One stop shop for buying homes, selling homes, home related services, professionals, etc

Oh no, that would never work.  I hate to say that it does.  It does not work on it's own at first - You have to tell the masses (Build it and they will come)

So lets look at the numbers of the Database

Insurance Database                                        2000 members average
CPA (working with business clients)                   5000 members average
Local Businesses (Mom and Pop)                         10 members average
Home Service Provider                                      300 members average
Local Police Dept                                              100 officers
Major Area Business                                        2000 employees

Total So Far                                                    9410 new members for you
Ratios     (One deal every 200 people)                  47 new deals

All because you offered a small amount of you commission as a discount if that company endorse you as the go to professional.

In my next article, I will cover what you need to have when rolling something like this out.

If you found this of interest, and better yet of use, please reblog this out to help with my link building.

The Great Debate: Discounting Commission and Building a Niche - Plant City, Florida

I don't normally get involved in debates and politics and religion.  But after seeing a fellow industry professional talk about whether discounting your commission to get the sale, I had to write my own article.  While the author was only asking questions and opinions, it was a lot of the opinions that caused me to want to pull out my soap box today.

First - Give credit where it is due: Thanks to today's (yesterday) featured article Amanda Simpson, Fayetteville, NC. Her (members only) article featured yesterday on AR about "Does Discount Your Commission Discount Your Percieved Value?" was well written, (I thought).  She gives great background information and even offered a great rebuttal in the opening paragraph.  Although, for the this writer's mind, there were one or two unanswered questions that made me wonder if I am comparing apples to apples, or am I comparing apples to bananas

Anyways, on with my thoughts for the rest of the community

Firstly, the model of discounting commission is not for everyone.  Just like I am not going to work well with 100% of the realtors, this idea is not going to work in every realtor business plan. I personally think that this is a great idea and business plan if deployed correctly.  It helps with:

• Niche Building
• Brand Awareness
• Business to Business Building
• Business to Consumers
• Geographically Sensitivity (Hyper Local Dominance)
• More Deals = = = More Money

Let's Define Discounting Commission: I am NOT suggesting that a realtor discount a whole percent of the 6% realtor commission.  This business model does not work that way.  While I know of other realtors who have dominated their local markets in Atlanta and Charlotte by offering 1/2 of 1% and $500 to list a home - They are simply doing like most realtors, Playing the Numbers, (The more homes you list in MLS, the more likely a chance of one selling). No this will not work for that kind of agent.  One top of which you tend to not work for your clients

Active Rain Referral Network: Have you checked this out recently.  Everyone is willing to take or offer an amount for handling clients both near and far away.  The norm being 25%.  In fact as I write this, the most recent referral was in Berkeley Springs, WV and wants 20% commission.  There are many agents that will land a deal and pass it off to another agent for a referral commission.  Isn't this the same idea?

Which is better - 17 or 25%.  My agents are required to give 17% of their commission (whatever it may be,       1 - 6%) to the client (buying or selling) in the form of either cash or closing cost credit.  This is the same idea of offering a Free iPad at closing when you find Homes For Sale in Plant City, Florida and you use my team to help you get it (note: these are not able to be used at the same transaction)

Let's do the Math:

The Typical Scenario
Agent gets from Broker 127,400 lead and requests 25% referral fee
$127,400 x 3% = 3822
25% Referral fee to Broker = $955
Money to Agent = $2867

The Change-Up
Agent get referral from the community, $127,400
$127,400 x 3% = 3822
17% Referral fee paid to client = $650 (rounded)
Money to Agent = $3172

Realtors are willing to give up 25% of their commission to work with another agent, but not 17% when the same person comes to the agent from niche marketing, such as a neighborhood, city, work place (such as your largest employer in your town), the military, or from cross marketing with certain industry segments, like an attorney. 

A realtor cannot just offer ONE thing (commission reduction) to make the idea work - there has to be more (like coupons from local business, discounted home services like a plumber or maid service, discounted professional service - if allowed by that industry such as a Financial Planner, attorney, etc). A list of homes for sale in the area is a must.   These areas are where I think many miss the boat.  See my additional followups to be posted Monday and Tuesday on How to do this and WHY is it important

REPSA Compliance:  A realtor, loan person, anyone can give ANYTHING to their client.  It is just that (as we know) we cannot give that money to a cross industry professional (mortgage to insurance, insurance to realtor, realtor to mortgage, etc) - So the answer is, yes this is RESPA Compliant

Let me ask it this way -

Would you as a realtor or loan officer being willing to give up 17% of your commission if your local insurance agent (or CPA, or divorce attorney, or Financial Planner or Title Company) that you do business with came to you with their entire database for you to market to?

In part two, I will show you how I use this to build a database using this niche concept

In part three, I will show you other working parts you need to have when creating similar model

I would love to hear what people think, so please sound off below.  Maybe you will come up with something that I never consider.

Come meet me live at the Video Marketing Roundup in Dallas.  December 10th to 12th and learn how to use video marketing to capture, enhance and dominant your niche marketing and explode your database

TECH TIP THURSDAY: How to Create a Panoramic Picture for your listings .. FROM YOUR CELL PHONE

I had to rush to get this out as I just saw my friend from Michigan do this with his I-Phone.  I don't have one yet (an I-Phone) so I learned how to do it with the Android!!!

Watch the video and learn how to use your mobile phone technology to capture a panoramic picture and insert that picture into your listing.

You will wow you seller

You will impress your buyers

You will save MONEY

You might even sell a house

If this helps you, imagine what I can do with just one more dollar.

Better yet, imagine what I can do for you .. as a loan officer!!

If you found this video and article of value, please, please, please, reblog it!!!

Like the credit card commercial says

Tell me, What's in Your Listing Presentation???!!!

Who's your bud?

Florida Strawberry Festival Concert Tickets and Guide 2011 - Plant City, Florida

One of the big events that I look forward to every year in March is the Florida Strawberry Festival in Plant City, Florida. When you are buying a home in Plant City, Florida or living around the area or region, this is one of the biggest events all year long.

There are many things to do at the Florida Strawberry Festival 2011. Sample things made of ...... STRAW-BERRIES and shop for arts and crafts from Plant City, Florida local vendors and artists. There are also great concerts every year.

Today, the Florida Strawberry Festival Concert Tickets and Guide 2011 was released. So here is the information first on the finance ninja's website. And there are some great acts this year

• March 03 2011 Kenny Rogers ("The Gambler" at 7:30 PM)
• March 04 2011 .38 Special (7:30 PM)
• March 06 2011 Trace Adkins (3:30 PM)
• March 06 2011 The Judds (this is their final tour, performing at 7:30 PM)
• March 07 2011 Clint Black (7:30 PM)
• March 09 2011 Tanya Tucker (3:30 PM)
• March 09 2011 Rick Springfield (7:30 PM)
• March 10 2011 George Jones (3:30 PM)
• March 10 2011 Doobie Brothers (7:30 PM)
• March 12 2011 Billy Ray Cyrus (7:30 PM - Mr Achy Breaky Himself)
• March 13 2011 Lady Antebellum wraps up the 2011 Florida Strawberry Festival Concert Series (7:30 PM)
  
  

While there are other acts at 2011 Florida Strawberry Festival Concert Tickets Series, these are the most notable and of interests. Tickets for the 2011 Florida Strawberry Festival Concert Tickets go on sale December 6th at 8:00. You can buy Florida Strawberry Festival Concert Tickets at www.flstrawberryfestival.com or by in embedded link in the words "Buy Florida Strawberry Festival Concert Tickets" - You can also call 813-754-1996

Prices for the Florida Strawberry Festival Concerts Tickets range in price from $10 - $25 with the performances by The Judds and Lady Antebullum both being $45 for each concert.

About the area, Plant City, Florida.

Named after railroad developer, Henry Plant, the city is known at the winter strawberry capital of the world. Of course there is the annual Florida strawberry festival 2011. Plant City, Florida also housed the Cincinnati Reds Spring Training until 1997. Before Plant City was known for the strawberries, the primary crop used to be cotton. Other attractions in the area in Dinosaur World with over 150 life size dinosaurs (trust me, kids love this place)

The average area temperature for Plant City is 83 degrees with 51 inches of rain. Situated off of Interstate 4, Plant City is very close proximity to Orlando, Lakeland, Tampa, Sarasota and the beaches in Clearwater and St Petersburg, Florida

Now you have great information about the Plant City, Florida community, let me give you great information about the housing market. When you are looking for Homes for Sale in Plant City, Florida or you are thinking about Selling a home in Plant City, Florida consider the team that we have in place at Plant City Home Benefits.

* Save 17% of the Realtor Commission when buying or listing a home. Either as cash at closing or reduction in costs at the closing table (on qualifying homes - Short Sales and REO Homes don't qualify)
* Save up to 25% from origination fees on your mortgage
* Get up to a $250 Appraisal Credit
* Receive up to a $400 Gift card of your choice
* Aggressive Property Marketing when selling a home in Plant City, Florida
* Additional discounts on Title Services, Inspections, Other Professional and Home Related Services of every shape, kind, model and flavor.
* Free Registration is required however (register at Plant City Home Benefits)
* Close Proximity to and Two Free Tickets to a concert of your choice along with the 2011 Florida Strawberry Festival (when you buy, sell, or refinance a home using the Plant City Home Benefits Team)