Merry Christmas From the Family at Blue Water Home Loans!

USDA Fees Are Increasing On October 1, 2012!

Act Now Before Costs Go Up!

USDA Rural Development and its loan program were designed to help improve the economy and quality of life throughout rural America. The program continues to remain a wonderful option for qualifying homebuyers, with zero down payment required.

But fee changes are coming!

Beginning October 1, the USDA Annual Fee will increase for both purchase and refinance transactions. In addition, the Up-Front Guarantee Fee will increase for refinance transactions.

If you want to find out what these fees increases could mean to you or someone you know, give me a call today. Home loan rates are still at historically low levels so if you or any of your friends, clients, or colleagues are looking to purchase or refinance a home, this is the perfect time to act...before it will cost even more to do so.

Fee Increase to Impact Home Loans

The Federal Housing Finance Agency (FHFA) has again increased the guarantee fee they charge to lenders delivering loans to Fannie Mae and Freddie Mac. This is important to know, as this increase has a rippling effect that will impact the cost of mortgage financing.

Here's what's happening and what it means to home loan rates:

What exactly is this "g-fee"? The guarantee fee or "g-fee" is an amount charged by mortgage-backed securities (MBS) providers, like Freddie Mac and Fannie Mae, to help protect against credit-related losses in the overall mortgage portfolio. In other words, it acts a lot like insurance and helps lower the overall risk...which means home loans can be offered at terrific interest rates to borrowers that have good – but not perfect – credit.

What exactly is the impact of the rate increase? The increase will impact loans with different amortizations in different ways. For example, for a $200,000 home loan, the increased g-fee (assuming a .125% increase in rate) would equate to $250 more per year in interest, or $7,500 more over 30 years. Someone buying or refinancing a home can certainly choose to buy down the cost with cash up front – but most folks will not do this.

Why is the guarantee fee being increased? FHFA has increased the guarantee fee to collect more revenue to enhance the safety and soundness of the Government Sponsored Enterprises (GSEs), and perhaps indirectly encourage private firms to participate in the mortgage market.

Who will this impact? The change will impact all new borrowers using Fannie Mae and Freddie Mac loans.

When will it start? Officially, the increase to guarantee fees will begin on December 1, 2012. However, Fannie Mae will also be making adjustments to pricing for those loans that are committed on or after November 1, 2012. It’s important to note that the increase is already being seen in rate sheets right now, since home loans being originated now will likely not be closed, pooled and securitized until December and therefore will need the increased g-fee priced in earlier.

The bottom line is that the g-fees will be going up...and this will impact homebuyers looking to obtain a home loan through Fannie Mae and Freddie Mac.

The good news is that home loan rates are still at historic lows right now, and it's a great time to purchase a new home or refinance. If you or anyone you know has any questions, please call or email!

Success By Hard Work!

It's football season again and I am really excited!  GO BLUE!!! In light of that, it reminded me of a great quote by famous football coach Knute Rockne:

"The best thing I ever learned in life was that things have to be worked for. A lot of people seem to think there is some sort of magic in making a winning football team. There isn't, but there's plenty of work."

It really is that way in life.  There are no short cuts!  Winning and success come with hard work!  So, as you start school or as your work year draws to a close, I want to encourage you to stick with your goals and continue to work hard!   You'll see it pay off in the end.  I will be working hard on my end to make sure that every client comes to Blue Water Home Loans has the opportunity to realize the American Dream of Home Ownership!

The Art of Database Management Part III: Reporting and Managing Information

The second part of Bill Gates' famous quote from Business at the Speed of Thought* deals with the subject of reporting and managing the information you've gathered. The unfortunate reality is that many people have databases full of useful information, but they simply don't use the information effectively. Many people think of a database as an electronic Rolodex®, when it is really so much more than that. A database is a living, breathing, proactive platform that can generate predictable results and keep bringing in new business for you. The only way to turn your data into useful information is through reporting. The more you know about your customers, the more you will be able to market to their relevant needs. In Part II of this series (Gathering Information), you were provided with a list of questions to ask your client. Let's look at the question of "What are your hobbies?" and see how we could use that information to create a better relationship with our clients. Wouldn't it be terrific if you had notes on all of your clients, and knew if they were fans of the Los Angeles Dodgers, Tampa Bay Buccaneers, or San Antonio Spurs? If you knew that information and could run a report listing all the people who fall into those categories, you could send those groups of people a congratulatory email whenever their team wins big, and connect with them on their level. If you knew the timeline up front when a client stated they were expecting an increase or decrease in pay, or any expected change in their financial situation, you could run reports on that information and proactively be ready to service them. Wouldn't this constitute terrific service? Don't fall prey to the never-ending cycle of gathering information over and over again and doing nothing with it. Remember, stagnant data does nothing to help you build your business. You need to be able to compile intelligent reports and use them effectively. I like to use drop-down menus in my database management software because, for reporting purposes, it is extremely important that the data you input is consistent. If you list some of your clients as "Bucks Fans," some of them as "Buccaneers Fans," and the rest as "Tampa Bay Fans," then your statistics would not be correct if you ran a report on how many "Buccaneers Fans" you had in your database. But, if you use a drop-down menu that allows you to select one option that is consistent (e.g., "Tampa Bay Buccaneers Fan") then you will have consistent results as you run your reports. This is called normalizing your database, and it solves a lot of these problems. We'll wrap up this discussion next time with The Art of Database Management Part IV: Meeting Customer Relevancy.

The Art of Database Management Part II: Gathering Information

Most of us are sales people when you get right down to it. Our job is to sell our services - and ourselves - as we strive to add more clients to our existing book of business. The unfortunate fact is that most of us are in such a hurry to sell our services that, in the process, we forget to do the most important thing relative to sales. Remember the quote from Bill Gates? The most important thing we can do is gather as much information as possible and understand what our customers need. From there, we can construct a presentation that has a high probability of giving them exactly what they want and hitting the bull's eye. We've all heard of The Golden Rule, "Do unto others as you would have them do unto you." I prefer to consider The Platinum Rule™* which states, "Do unto others the way they would want you to do unto them." The only way to accomplish this is by asking intelligent questions up front when speaking to clients and making a better effort to understand them. Here are some examples of questions you should be asking clients at your first meeting: What are your hobbies? Do you have a clearly defined investment strategy? Would you consider your investment strategy to be conservative, moderate, or aggressive? How old do you want to be when you are financially independent and completely debt free? Do you currently have a college fund set up for your children? What is most important to you about the relationship you are seeking with someone in my profession? What is your preferred form of communication during this process? If you had honest answers to all of the questions listed above, on every one of your clients, wouldn't you stand a better chance of being able to provide them with what they need, thereby ensuring they will be clients for life? Wouldn't they also refer more of their family, friends, and co-workers to you? Stay tuned for The Art of Database Management Part III: Reporting and Managing Information * The Platinum Rule™ is a registered trademark of Dr. Tony Alessandra.

The Future of Your Business Hinges On It

The following comes from a marketing coach I admire, Tim Braheem.

I’m often asked the question, “If there were just one thing that I should be doing for my business, what would you suggest?”  The answer is simple, dial in your customer service platform to outrageous levels.
Let me make it simple and direct, it’s a zero sum game we are talking about.  Every person that you ever do business with is either a referrer and repeat customer, or they are not.
You have one chance to blow them away and it’s when you work with them that first time.  If you do, they will result in numerous additional transactions in the future and if you don’t, you will have just cut off a huge stream of income.
Think about a time when you have been blown away by really great service.  Maybe it was a waiter who made you feel special and tended to your special request, or a hotel who made sure that everything was just right for your stay.  Did you go back?  Did you refer them to anyone by sharing your experience with your friends and family?
Now, lets look at the inverse.  Think of a time when you were greatly disappointed in the service you were getting.  What did you do next?  Did you refer them to someone you knew?  Maybe an enemy, but certainly no one you cared about I bet.  I wouldn’t be surprised if you actually went out of your way to dissuade those that you knew from ever working with that company again, by telling your horror story, creating the opposite effect.
By now, you may be asking “What about those in the middle, the service platforms that just get by, just do an adequate job, failing to turn heads but not doing anything to offend me?”  I’ll respond with a question of my own, “If you’re not memorable, then how do you expect to be remembered? “
Here are some suggestions on how to be memorable and to make sure that everyone you do business with, is a fan and not a foe:

1.   Intentionally under-promise and then over deliver:  One of the biggest mistakes I see made is a false promise for “World Class Service” followed by something that resembles second class.  It takes confidence and integrity to undersell yourself to set up the WOW experience, but when you do, it's like going to the movies and being blown away by a small budget independent film that no one knew about.  What’s the first thing you do?  You go tell everyone.

2.   Focus on the Little Things:  It’s the little things that no one expects that make all the difference and often don’t cost you any money.  Put together a professional looking beverage menu in your office and stock your company refrigerator with more than just water and soda.  When your client comes in, have your front desk person surprise them with a touch of class.  I will never forget the night that I ordered a movie at a hotel and was asked by the front desk if they could deliver some fresh popped popcorn to my room!  I’ve been back there four times since and am still talking about it twelve years later.  It’s the San Ysidro Ranch by the way!

3.   Deliver Bad News Early – One sure way to lose a client for life is to treat them like they are stupid.  Too often I see service people run for the hills when its time to share bad news with their client.  They miss on the opportunity to show integrity and to make a bad situation good.  Honesty is the best policy here.  Simply share with them the truth of what happened and if that means taking responsibly, that shows integrity, we’re all human anyway.  The key is to deliver the news as soon as you get it and to provide solutions going forward.  I have never had a client angry with me when I take this approach.  What I do find is that they will want to vent and if they do, let them.  In fact, there is nothing more important that allowing them to blow off steam.  Guess what, if they don’t blow it off with you, they will to someone else who is a potential customer of yours!  The inverse is hiding it from them as long as you can and them knowing that something is wrong and having to confront you with it.  Nothing is more frustrating to a customer and a sure way to get them to never come back.

4.  Thank Them – This may sound obvious, but it’s surprising how many people don’t call their client after they have completed a transaction with them, thanking them for their confidence and trust in you.  Try this one on for size.  Many of us call them every day when they are a potential customer.  Then we taper back to once a week or so when they are a current client.  Finally, this transaction has concluded and we stop calling them at all!  What message are we sending to them?  Do we really want them to think that they were really only about this one paycheck?  The best thing that you can do after the transaction is complete is pick up the phone and thank them and ask them if they have any constructive feedback as to how you can do a better job.  Let them know that you value them and that you would love to work with them again and if they have anyone who they know that might be in need of your assistance that you would be honored to have the opportunity to work with anyone who they might refer. 

To your success,

Tim Braheem

The Art of Database Management Part I: Working Smarter

The relationship you develop with your customers, combined with the personal information you are constantly collecting, can be a goldmine for future business. The fact is most business professionals spend a significant amount of money marketing to people they don't know in an effort to procure new business.

Wouldn't it make more sense to go deeper with your existing clients – to really understand their needs – and spend your marketing dollars on people you already have a relationship with?

In Bill Gates' book, Business at the Speed of Thought,* he states:

"How you gather, manage and use information to serve the needs of your customer will determine whether you win or lose in your business."

This is a terrific definition of database management. Database management is about gathering information about your customers so you have an understanding of their relevant needs. From there, you can proactively structure a plan to give them exactly what they want.

Have you ever provided excellent service to clients only to have them turn around and use the services of one of your competitors without even giving you the opportunity to make a bid for their business? When this happens, it happens for a reason. The fact is, your client had a need and you weren't there to fulfill it for them, probably because you didn't even know they had a need.

We now have the ability to run reports and analyze the information you have about your customers. You can then use that information to put yourself a step ahead of the competition. By proactively serving your clients' needs and interests, you will no doubt become more successful

Happy 4th of July!

I hope you and your family have a very safe and happy Fourth of July!  Someone said: "Liberty is the right to choose, freedom is the result of choice."  I hope you have a chance to choose to reflect on all the freedoms we are blessed with in this country.  I hope this will motivate you to say thank you to the heroes that have risked everything to secure said freedom!  HAPPY FOURTH OF JULY!

If there is ever anything I might do for you please do not hesitate to give me a call!

Lead Follow-Up Campaigns- Never Give Up On a Lead!

You might wonder, "When is a lead no longer a lead?" A lead is always a lead until the person tells you to stop calling. The key to success in sales is professional persistence. Take time to earn the loyalty of prospects by showing them that you add more value to the equation than anybody else in your field. One critical element to remember about a successful lead follow-up campaign is that it should be easy to implement.

Build a series of letters (i.e., templates) and load them onto your computer. With a few clicks of your mouse, you will generate an outbound correspondence that encompasses your prospective client list and helps them realize that you are sincerely interested in working with them. You must leave an indelible imprint in their mind, which will give you a competitive edge if they have not yet decided with whom they will work. You must rouse prospective clients to wonder:

"What will I miss out on if I don't work with this person?"

Once you motivate the prospect to ask that crucial question, your battle has been won. How can you prompt prospects to ponder this question? It's simple: Teach them! People instinctively want to learn, especially when it comes to "big ticket" transactions like purchasing real property and financing homes. The more you teach them, the more they will want to work with you, so it is important to establish yourself as a consultant.

Many subtle changes occur regularly during real estate transactions that can make buyers feel vulnerable and anxious. They're filled with all types of questions and they look to you as the expert. How do you read an appraisal? What are key components of a home inspection report? What are the various non-recurring fees associated with buying a home? What is tax deductible during the loan process? What are some characteristics to look for when selecting a skilled real estate agent? The list never ends. Draft documents that address consumers' concerns before they even ask.

By maintaining contact with your prospects on a weekly basis using a drip campaign that contains valuable educational material, you will have made yourself invaluable to them. You'll be amazed by how much your conversion ratio from prospect-to-client will skyrocket!

Achieving Goals with Social Media

Here are four social media sites and apps that can help you set your goals...and stay on track!

Tweet Reminders.
Twitter is great for connecting with people and sharing news instantaneously. But did you know it's also a great way to remind yourself about tasks? Need a reminder to go to the gym...or to call those past clients? No problem. Visit the Tweet Reminders site, and then enter your Twitter username and up to 5 tasks or reminders. You can even pick a date and time. Then, Tweet Reminders will send you a direct message on Twitter to remind you about them. It's both an easy and helpful thing to do.

Moteevate.
Regardless of whether your goal is big or small, this site has the inspiration, energy, and advice you need to reach it. With moteevate, you get support from people you already know as well as advice from experts in the field–all while being surrounded by people looking to achieve similar goals. You can even moteevate in teams and act as moteevators for each other. The site also includes cool trackers to record your progress and milestones. Plus, you can customize the privacy settings to keep your goals to yourself or share them with others. And best of all, the basic platform is free to use with the caveat that you pay whatever you want after you achieve your goal. In fact, this honor system is the only thing old-fashioned about moteevate.

Toodledo.
This is a businessperson's dream app. You've no doubt seen a To-Do list before...but this app kicks it up a notch! Not only does it help you easily organize your tasks and set alarms, but it also allows you to collaborate with other people and establish sub-tasks to work towards your goal in small steps! Plus, Toodledo can be used on your mobile phone, in your email, on your calendar, and even integrated directly into your web browser. So you can stay on track from anywhere...and at any time.

StickK.
The basic principle of this app is that "incentives get people to do things." So if you really want to achieve a goal–whether it's personal or professional–it's time to put your money where your mouth is. Basically, stickK allows you to create a Commitment Contract focused on achieving a specific goal. As part of the process, you set your goal and timelines, stakes, referee who will monitor your progress, and supporters who will cheer you on. If you achieve your goal in your timeframe, you don't lose the stakes you wagered. But–the best part is–even if you don't achieve your goal, the money you wagered goes to a worthy cause or charity that you designate. So it truly is a win-win situation!

Tips for Handling Disgruntled Clients

The only constant in the financial markets is change, a concept that can sometimes scare, confuse, and even anger some of our clients and associates. And, while we may have no control over certain delays and hiccups in our transactions due to these changes, we can control how we react to the frustration of our clients.

The following are three basic steps to consider when dealing with an upset or angry client. Utilize these steps to salvage your relationships and save your commissions.

Step One: Listen, and take careful notes.
Allow your client to vent all of his or her frustrations without interruption. By being the shoulder they can cry on, you have a much better chance of diffusing the situation and preserving the relationship.

Step Two: Take responsibility.
Whether it's your fault or not, take responsibility and apologize for the frustration he or she is experiencing. Don't make excuses! If nothing else, this action takes away any further arguments that they might have had on the subject.

Step Three: Provide solutions.
How are you going to remedy the situation and make things right? Can you make things right? Be prepared to answer these questions and, more importantly, be prepared to provide actual solutions that make sense for everyone.

One of the biggest mistakes professionals make in this situation is attempting to defend or even argue his or her case. Almost always misperceived, this type of communication only makes things worse, creating conflict that puts others on guard or makes them even more upset than they were to begin with.

By utilizing these basic steps, it's possible, in most situations, to avoid a nasty confrontation and achieve a positive outcome for everyone involved.

If you have any other successful strategies on this important topic, please don't hesitate to call me!

Ask for Referrals And Get the Answer You Want!

Too often, people are frightened of asking for referrals. Is it the fear of rejection, or are they concerned about annoying their prized clients? If you're providing truly exemplary service, you shouldn't be ashamed to ask for the opportunity to provide that same service to other people your clients know! In fact, it should be the next natural step after asking a client how the service was.

The way you ask this question, however, is very important. Open-ended questions help people to brainstorm, instead of giving them the chance for a simple "Yes" or "No" answer. Instead of asking, "Do you know anyone else who could use my services?" ask, "Who do you know who could use my services?" The difference in how they respond is amazing!

It's also critical to expect the referral. When your tone or facial expressions show that you don't really believe your client will have a good answer, they won't have one! Don't let your body language change your question into, "I don't suppose you have any referrals for me, do you?" Instead, expect the referral like it's the most natural thing in the world. With enough practice, it will be!

If people seem tentative, or they say they'll think about it, tell them you'll get back to them, and set a specific time to do so. Keep the appointment, even if it's just a phone call. Remind them that this is the way your business model works. You "get buys" with a little help from your friends.

You can also use this language in the signature of your email, below your name and contact information. Every email becomes a mini-billboard, even when you're out of the office and have your auto-responder set.

One of the best referral generators I've heard of is simply a delicious fruit basket. Greg Frost, one of the nation's top loan originators, pioneered this technique. He sends a fruit basket to his client after the close of a successful loan. Unlike candy, which tends to get hoarded by the recipient, fruit has a built-in expiration date, so people keep it on display to share. He sends this fruit basket to his client's place of employment, which makes them feel special. When co-workers ask where it came from, the client simply says, "My loan executive gave it to me." This opens the door to many subsequent referrals. 

Please let me know how these ideas work for you, and don't hesitate to call me if you have any questions.

A Home Repair Loan

FHA's Streamlined 203(k) Loan Program

I wanted to make sure you knew about a wonderful loan program that lets homebuyers finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. FHA's Streamlined 203(k) Loan Program helps homebuyers tap into cash to pay for property repairs or improvements, like those identified by a home inspector or FHA appraiser. Here are some of the eligible repairs and improvements for the 203(k) loan program: Repair or replacement of roofs, downspouts, and gutters Repair, replacement, or upgrade of existing HVAC systems Repair or replacement of flooring Minor remodeling (i.e. kitchen) not involving structural repairs Painting of the interior and exterior Weatherization, including storm windows and doors, insulation, weather stripping, etc Purchase and installation of appliances, including washers and dryers, refrigerators, dishwashers, microwave ovens, and free-standing ranges Accessibility improvements for people with disabilities Repair, replace, or add exterior decks, patios, or porches Basement finishing and remodeling not involving structural repairs Window and door replacements and exterior wall re-siding Septic system or well repair or replacement Lead-based paint stabilization or abatement of lead-based paint hazards (engineer's report required upon completion)

FHA 203(k) loans can be used for purchasing a primary residence or refinancing the rate and term. Cash-out refinances are not allowed.

If you have any clients who you think may benefit from this program, let me know and I'll be happy to review their situation anytime.

Oil Prices and Home Loan Rates

Nobody likes to pay more at the pump. But when it comes to how oil prices impact the economy...and home loan rates...here are some important factors to consider, and to share with your clients. On the one hand, high oil prices can be very detrimental to the fragile U.S. economy, as consumers have to put more money into their gas tanks–which means they have less to spend elsewhere. High oil prices are also inflationary since the added shipping and material costs apply upward price pressures on Producer or Wholesale goods that either have to be absorbed by the producer (thus hurting profits and the ability to expand or hire) or passed on to the consumer...a la a rise in consumer inflation. On the other hand, high oil prices could actually be good news for home loan rates, as the dampening effect on economic growth produces a sluggish economic environment in which Bonds (including Mortgage Bonds, to which home loan rates are tied) thrive.

Balance, Burn It In or Burn Out

I thought this message by Tim Braheem, CEO of Performance Experts was worth sharing.


Balance, Burn It In or Burn Out –
In the past fifteen years as a business consultant, public speaker and a coach, the number one area that I am asked about is life balance. It makes sense really. Work is where we spend more of our waking hours than anywhere else and as a result, it has a propensity to shift the scales of life too heavily to one side, throwing us into a state that we refer to as “Out of Balance”.

Recently, I surveyed a large list of potential coaching clients and in excess of 80% of those surveyed rated their relationship with themselves as poor. When asking that same group to rate their satisfaction with the amount of time that they spend doing things that they love, a similar result was produced.

In the hectic and achievement based society of the United States, life can at times feel as if its slipping away as we tackle our list of tasks. Many of you may feel as if you’re on a treadmill and you can’t find the stop button. Burnout, stress and depression are three of the great causes of disease and divorce, much less lack of productivity in the workplace.

In his timeless classic The Seven Habits of Highly Effective People, Stephen Covey shares, “The key is not to prioritize what you schedule, it’s to schedule your priorities.”

This simple sentence provides us with a big step in the direction of life balance. To go a bit deeper, I suggest that you define the “Non-Negotiables” of your personal life. By non-negotiable, I mean those relationships, hobbies and desires that you feel you deserve to nurture and cultivate in your life. What I see most often from those that feel they are out of balance, is a failure to isolate these areas and make them a non-negotiable priority in their life. Instead of scheduling their priorities, many of us try to “Fit Them In” when we have room. The problem is often that we don’t have room and even if we do, we’re too wiped out from reacting to life to take advantage of it.

Once you have come up with your list, my next suggestion is to “Burn Them In” to your schedule. From there, life needs to work its way in around your non-negotiables.

As an example if you don’t feel like you spend enough time with your children, then I suggest that you schedule it into your calendar to have a “Mommy Day” or a “Daddy Day” once a month where you take them to the park or to play miniature golf, or the beach. When you schedule it, you will have a much higher probability of getting done. Another example may be that you don’t feel that you have enough time to work on your relationship with yourself. If you love nature, then make a non-negotiable commitment to yourself that one morning a week you’re going to schedule to wake up one hour earlier and go for a morning hike or walk in the park.

Remember, if you wait for your schedule to open up for these important desires of life, it just might not. Burn it in or burn yourself out.



To your success,



Tim Braheem