There has been a huge uptick in trigger lead solicitations since mortgage rates moved up last year. When loan volume decreases and revenues decrease some mortgage companies start utilizing any tool to increase market share. One of these tools is purchasing trigger leads from the credit bureaus.
A Trigger lead is generated when a credit report is pulled. This “triggers” Experian, Trans Union and Equifax (the 3 national credit reporting agencies) that a consumer is shopping for a mortgage. The credit bureaus then take the consumers information and sell this to other lenders.
Soon after the information is sold to other lenders a consumer may be bombarded with phone calls, emails and mail solicitations. Some unscrupulous lenders will call consumers claiming to be a processor working on their loan to try and obtain borrower identifying information such as date of birth or social security number. Never give your information out to a random mortgage solicitor calling from an unscrupulous company. I do not hire processors or any other staff so the only point in contact for the loan will be me…on every transaction.
When I pull credit reports on my clients, I always leave off the phone number and email address to avoid this information passing on when the trigger lead is sold. As a consumer you can protect yourself with the following 3 options to opt out of the trigger lead cycle:
1. Register at optoutprescreen.com. This will opt a consumer out of unwanted solicitations for five years and it costs nothing. It does usually take one to two weeks for it to take effect so the earlier this is done, the better.
2. Sign up at the Do Not Call Registry, donotcall.gov. This is also free and should take effect within 24 hours, however a borrower may have already ended up on a trigger lead list prior to registering so could still receive calls for up to 31 days. Being on the DNC list does not mean all calls will stop. A consumer can still get calls for political reasons, from charitable organizations, survey calls, collection calls and some that are labeled “information calls.” Some lenders have used this last one as a loophole to get around the DNC registry. They will claim they are not trying to sell a person anything, but they are just providing information as to other options available which is utter nonsense.
3. Sign up at DMAchoice.com. This will stop loan offers and other offers from coming to your physical mailbox. There is a $2 cost for this.
Mortgage rates have stayed stable over the last month. Nothing too dramatic to report. Please subscribe to my free rate analysis page at https://www.axelmortgage.com/DailyRateLockAdvisory if you would like to keep track of market trends.
If there is anything I can do for you or anyone you know I look forward to help. As always, my family and I thank you for the continued support and referrals.
5/1/2023
I received dozens of phone calls and emails over the last week questioning the new pricing matrix implemented in the conventional loan market by Fannie Mae and Freddie Mac. Many have been outraged by the notion that the government is penalizing borrowers with excellent credit to subsidize borrowers with poor credit. Please understand that these internal tweaks to pricing do not mean borrowers with lower credit scores will receive better pricing than those with excellent credit.
There are many factors calculated in a lender’s pricing system when determining 0 point rates. These factors include credit score, down payment, property type, loan officer compensation, loan type (cash out refi vs purchase loan), length of rate lock and program selected to name a few. These internal adjustments are not new and have been around since I started in the business back in 1995. This “matrix” of internal pricing adjustments has simply been updated to help make homeownership slightly more affordable to borrowers with lower credit scores and lower down payments. But to clear there is no scenario where someone with a low credit score will have a lower 0-point interest rate than someone with a higher credit score.
In a nutshell this is how the new pricing matrix works: The new conventional pricing matrix has made it necessary for borrowers to put down 25% and have a minimum credit score of 780 (up from 740) to avoid any pricing adjustments. Borrowers with scores lower than 780 and down payments or equity less than 25% will be hit with pricing adjustments that will have an impact on the final rate delivered. The lender will need to raise the rate to offset the higher internal cost of the loan to deliver a 0-point price point.
This new pricing matrix has hit large retail lenders much harder than small brokers. Axel Mortgage’s pricing for these pricing buckets is far more competitive than large lenders. Large lenders need to dramatically increase rates to offset these new pricing changes due to their multi tiered management structures and high compensation requirements. Once again, the small broker wins!
Thank you as always for the continued support. My family and I sincerely appreciate it.
I wish everyone a fantastic May!
2/2/2023
The two-day FED meeting concluded yesterday. The Funds Rate was increased by .25%, but mortgage interest rates DROPPED by .25% overnight. Please remember the Federal Funds Rate will impact consumer loans like HELOC’s, and car loans far more dramatically than mortgage rates. Once again lenders over hedged to be safe in the event the FED increased greater than .25%, thus the reduction in rates. Mortgage rates are the lowest they have been in over 6 months.
Purchase season is in full swing, and sellers are once again offering incentives to buyers in the form of price reductions or closing cost credits. New products have hit the market making it more attractive to accept a closing cost credit in lieu of a price reduction.
3/1, 2/1 and 1/1 buydowns are available to temporarily drop the initial interest rate on the buyer’s mortgage by up to 3% below the current market rate. It is now possible for a buyer to have a 3-point reduction in their start rate and no closing costs on a purchase loan depending on the amount of the seller credit. Imagine a sub 3% start rate! I can work up a detailed analysis to illustrate if a sales reduction is best or a closing cost credit is best prior to contract finalization so please call for details.
One-time close construction loans are on the horizon. Stayed tuned as I roll out new products.
My job is to find you the best program at the cheapest rate and cost while professionally managing all details making this the easiest and most affordable mortgage transaction you ever closed. I am always available to my clients via email and available during normal business hours via my office phone line. My website is available 24/7. Rest assured if I receive a 911 email from you concerning a contract over the weekend you will receive a call back within the hour.
I hope everyone has a wonderful February. Thank you as always for the continued support and business.
A quick personal note…..
2022 was a tough year for me both personally and professionally. Mortgage rates more than doubled during the first 7 months of the year which left all of us shell shocked. We in the industry knew the hikes were coming, but no one forecast them increasing so quickly. In 27 years of lending, I have never seen a more aggressive rate hike or a more aggressive slow down due to decreased demand.
Then in August my father passed away after a valiant fight against Parkinson’s disease. We knew this was coming but didn’t expect it to happen so suddenly. Then in late September my mother’s home took a direct hit from hurricane Ian. I honestly thought we had lost her too as the storm surge engulfed Fort Myers and Cape Coral Florida. Thankfully mom was OK. This coupled with the rapidly rising rates and significant reduction in business sent me in an emotional tailspin.
For the fist time since I started working at 18 years old, I decided to take a sabbatical and allow myself to breathe and heal emotionally. Thus, I took time off from Oct 1st through the end of 2022. I apologize for not keeping the rates updated and not answering the phone in my office during this time.
I am back at the helm of Axel Mortgage and ready to introduce exciting new products and keep everyone up to speed on this crazy market. 2023 will likely be another very dynamic year and we expect to see rates/pricing adjust accordingly. This slowdown and upturn in rates will likely bring some tremendous purchase and investment opportunities so stayed tuned.
I am absolutely committed to keeping Axel Mortgage rates and costs the lowest you will find in the industry. While most big bankers and banks are increasing rates to increase profit to compensate for much lower demand, I am working with the best lenders in the country to lower rates for my clients. You will continue to find Axel Mortgage rates to be at least .25% or more below my competitors….with simple, no BS, no bait and switch pricing.
I look forward to working with you and your referrals in the coming year and want to wish you and your loved ones a very happy new year.
Sincerely,
Jim
Axel Mortgage has an all-digital application process and may soon have an all-digital closing platform. Imagine esigning all required documents from beginning to end on your smart phone. This may become a reality in the next few months. Stay tuned.
Need a rush closing on a purchase loan? Our average turn time is less than 2.5 weeks. We table fund which means we can fund the loan the same day you sign loan documents. No 11th hour funding conditions that hold up the purchase and no more needing to sign closing documents 3 days before loan funding.
Half the loans we funded the month of March did not require an appraisal for final loan approval. If an appraisal waiver is received in underwriting it saves our client $470-$550 in upfront costs and dramatically shortens processing time. Appraisal waivers are available on both purchase and refinance loans. We closed an FHA conversion to Conventional refinance in 7 days in March that saved the borrower $312 per month with NO upfront appraisal costs and NO closing costs. KA CHING!
Last month we rolled out High Balance Conventional loans for the whole state of Arizona. This product previously was only available in Coconino County, but is now available state wide. This program has underwriting guidelines and rates that are very similar to conventional loans. The program is available for loan amounts between $453,100 and $679,650. This program offers lower rates, more flexible guidelines and fewer requirements than JUMBO loans.
Some lenders are slowly beginning to phase out the 1% down Home Possible and Home Ready programs. We still have several lenders committed to selling and servicing these products so if you know a first-time homebuyer that wants to purchase a single-family home with only 1% down, please have them call us. This is a fantastic program that I call "The FHA Killer" and is available with no monthly mortgage insurance.
If there is anything I can do for you or anyone you know I look forward to helping. As always, my family and I thank you for the continued support and referrals
SIncerely,
Jim Merrill
Axel Mortgage Inc
602-795-3541
jim@axelmortgage.com
Mortgage rates thankfully dropped 1/2 point during the month of October and are the lowest they have been since the enormous hike back in June. 4% (4.016 APR) is currently available for a 30 year fixed program with no points. 15 year fixed pricing is currently 3.125% (3.054 APR) with 0 points. With property values the highest they've been since 2008 and rates this low, it is a great time to refinance.
I have approved a new lender for Axel Mortgage that is doing some amazing things.
I now have a Fannie Mae direct lender that underwrites exclusively off the underwriting findings of Fannie Mae with no investor overlays. This means much more liberal underwriting requirements and much less paperwork from you to get approved. The best part is this lender is only .125% higher in rate than the best priced lender in the country. Here are some of the things we can now do:
1. Cash out refi on a home purchased for cash 1 day after purchase
2. We can accept transferred in appraisals
3. Up to 10 financed properties OK (previously it was 4)
4. Flipped properties OK for purchase (3 month seasoning previously required)
5. Financed or Lender Paid Mortgage Insurance up to 95% LTV-this removes the monthly mortgage insurance payment and drops the payment substantially
6. Unpermitted additions OK
7. Conventional financing with as little as 3% down (yes 3%...not a misprint)
8. We can now table fund....this means no 11th hour surprises after you've signed loan documents. This is great for purchase loans!
Last week the AZ Dept of Financial Institutions performed their 3rd required audit of Axel Mortgage Inc. I am please to report we passed with flying colors. A funny thing happens when you operate ethically and honestly and always put the client first....the regulators leave you alone.