Archive for October, 2013

Selling on the Small Screen

Posted by Joel pate in Home Builders. Tagged: , , , , , , , , ,

If pictures are worth a thousand words, some home builders are figuring out that moving pictures on YouTube videos are worth exponentially more without costing exponentially more. Real estate professionals can also take a cue from this phenomenon, whether they are representing small to medium homebuilders or just marketing their individual listings.
YouTube, the second most popular search site behind Google, has become a powerful advertising tool for some home builders.

“While YouTube has long been primarily thought of for entertainment, we are finding it as one effective way to get in front of the right audience,” says Deborah Wahl, PulteGroup’s chief marketing officer. The company uses YouTube to market its three brands: Centex, Del Webb, and flagship Pulte.

When Pulte rolled out its new Pulte Life Tested home designs last spring, it launched a video to explain the new designs and show what they look like in a home setting. It includes interviews of real people — sharing what they’re looking for in a new home — from the focus groups that helped create the new designs. The clip had more than 750,000 views in four months.

“Video is effective in communicating our home building brands because it allows viewers to get to know us,” Wahl says. “Video gives you the sense of what a company is all about and can truly support branding efforts like no other medium on the Web.”

YouTube is but one part of Pulte’s Internet arsenal in a day and age when more than 75 percent of people use the Internet to search for homes, some even before setting foot inside a community, and many before even talking to a Realtor, Pulte says.

The videos Pulte uploads to YouTube give viewers a good idea of what the community looks like, what the homes and amenities look like, and plenty of images of local entertainment venues, grocery stores, and other nearby shopping.

Reeling in Prospective Buyers

Clayton Homes, a large builder of manufactured modular homes headquartered in Maryville, Tenn., uses its YouTube channel to walk potential buyers through its products, but it also has become a tool to nurture them through its three- to six-month time period between first interest and purchase. Clayton sends video links to prospective home buyers to educate them about its products and processes, emphasize the structural integrity of modular homes versus old-style mobile homes, and show the construction and delivery processes.

While many of the videos are instructive and persuasive, some are merely entertaining, designed to foster “warm home” feelings about Clayton Homes. There’s one with the co-stars of Duck Dynasty, Phil and Kay Robertson, sitting in their kitchen, discussing how Clayton Homes are built in America as they cut into a sweet potato pie and talk about filling a home with love.

“Right off the bat we really weren’t sure what to expect” from the advertisements, says Jim Greer, Clayton’s lead generation manager. “It has turned out very well for us. We are excited about the results.”

Immediate Gratification

Unlike some forms of advertising, results can be measured from YouTube, and advertisers need to pay only for the traffic they get versus a newspaper advertisement that costs the same no matter the results. “You pump money into that and you know real quick whether it’s successful,” Greer says. “Digital mediums in general tend to be a lot cheaper cost.”
The Internet is changing the way many people are buying products, says Patrick Grandinetti, Google’s head of real estate industry. The old rule of marketing was that there were first and second moments of truth that determine what a consumer will buy and whether they will keep buying it. The first was during the three to five seconds when they are looking at a product’s logo in the store, and the second was after they took it home and used it. Now there is a new moment of truth that sometimes comes before the other two, says Grandinetti: The results of Internet research customers are doing before they even go to the store.

For tutorials on how Google advertising works, visit

By: Teresa Burney,

Mortgage Closing Costs Increase in 2013

Posted by Joel pate in Mortgage Loans. Tagged: , , , , , , , , ,

The average fees that mortgage lenders charge consumers to close on a home loan have increased in the past year in most states, according to Bankrate’s annual closing-cost survey.

A homebuyer getting a $200,000 loan pays an average of about $2,400 in origination and third-party fees, such as the appraisal, according to this year’s survey. That’s a 6% jump from 2012, when the same fees averaged about $2,264.
Most of the increase is tied to fees paid directly to the loan originator. Excluding third-party costs, origination fees alone were up about 8.4% compared to last year.

Why fees are up

The low-mortgage-rate environment has played a role in the rise of closing costs in the past year, says Anthony Sanders, professor of real estate and finance at George Mason University. As historically low rates attracted large waves of refinancers, lenders didn’t have to compete as much for business, Sanders says.
The increased demand for loans has allowed lenders to charge higher fees while they can, he says. “Banks realize that rates are going to go up and are trying to capture fees early on. They know when rates go up, loan applications plunge, so they are trying to generate more earnings on anticipation of lower application volume and lower profits.”
As rates climb and fewer homeowners can save money by refinancing their mortgages, loan originators will likely reduce origination fees to attract more borrowers, he says. “They will have to lower the closing costs where it’s possible to attract more business.”

New rules cost banks

Many lenders say closing costs have increased partly because lenders have been facing higher expenses to implement a series of new Consumer Financial Protection Bureau mortgage regulations. Many of these rules go into effect next year, but lenders are gearing up for compliance in advance.
“The cost of compliance is enormous,” says Anders Hostelley, chief production officer at Honolulu HomeLoans. “As a mortgage banker, we are having to staff up. We just hired another compliance person recently.”

Hawaii is most expensive state

Hawaii had the highest closing costs among states in the 2013 survey, with $2,919 in fees. It had the second-highest lender fees and the highest third-party fees.
Closing costs are so expensive in Hawaii partly because of the limited supply of mortgage professionals and third-party vendors such as appraisers on the islands, Hostelley says.
“We are always looking at our competitors, trying to recruit someone away, and that drives up the average cost per loan,” he says. Training new professionals or recruiting them from out of state is an option, but the costs aren’t necessarily lower. The average salary that we have to pay is still pretty high compared to what we would have to pay on the mainland.”
Hawaii, whose population is about half that of Chicago, has a 4.7% unemployment rate — well below the national average.
Alaska was the second-most-expensive state for closing costs this year, followed by South Carolina and California, which has the highest origination fees in the nation. The survey does not include title insurance, escrow and local taxes.
The least expensive states to get a mortgage were Wisconsin, Missouri and Kansas.

Borrowers encouraged to shop for lower closing costs

It’s unlikely, of course, that someone would move to Wisconsin just to pay low closing costs, but a borrower can shop around and compare fees from different loan originators to make sure he or she gets the best deal in their area.
When applying for a loan, homebuyers should make sure the lender gives them a form called the good-faith estimate, says Alex Jacobs, executive vice president and national production manager for SunTrust Mortgage. The government-mandated form gives borrowers an itemized summary of the loan terms, including origination fees, which are the fees paid to the lender to originate the loan.
“The good-faith estimate is probably the best way to compare costs,” Jacobs says. “All lenders are required to provide that to the borrower.”
Some lenders may offer lower closing costs but charge a higher interest rate — and vice versa. One useful tool to compare apples to apples is to look at the annual percentage rate on the form. The APR incorporates closing costs into the interest rate you are quoted to show you the annual cost of the loan, Jacobs says.
“I encourage consumers to look closely at their good-faith estimate,” he says.

By: Polyana da Costa,


Posted by Joel pate in Credit Repair. Tagged: , , , , , , , , , ,

Justice Department Files Lawsuit Against Three Related Companies for Violating Fair Credit Reporting Act.

Created on Thursday, 11 October 2012 20:31

Written by IVN

San Diego, California – The United States has filed a complaint against three related companies that bought and sold consumer credit reports, the Justice Department announced today. The government’s complaint charges these companies with violating the Fair Credit Reporting Act (FCRA). The companies have agreed to pay a $1.2 million civil penalty to resolve these charges.

In a complaint filed Oct. 9, 2012, the United States alleged that Direct Lending Source Inc., and Bailey & Associates Advertising Inc., both Florida corporations, Virtual Lending Source LLC, based in San Diego, Calif., and the principals of all of these entities, Robert M. Bailey, Jr. and Linda Giordiano , violated the FCRA by failing to comply with provisions forbidding the sale of credit reports without a “permissible purpose.” The complaint alleges that the defendants purchased thousands of “pre-screened” consumer lists, or collections of credit report data. The only permissible purpose under the Act for using such prescreened lists is to make “firm offers of credit or insurance” to consumers. However, the complaint alleges that the defendants re-sold the lists to dealers who marketed loan modification, debt relief and credit repair services rather than making firm offers of credit. According to the complaint, some of the dealers who purchased the defendants’ credit report data have become the subject of law enforcement actions or warnings involving fraud committed against consumers in financial trouble.

The complaint also alleges that the defendants did not take reasonable steps to identify the ultimate purchasers of the credit reports. In some cases, according to the complaint, the defendants sold lists to brokers who then re-sold them to unidentified entities.

“The sensitive financial information in credit reports must be protected from those who would use it to target vulnerable consumers for sham offers,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “We will work with the Federal Trade Commission to aggressively enforce the laws that safeguard these reports.”

Along with the $1.2 million civil penalty, the defendants agreed to injunctions against future FCRA and FTC violations in a proposed consent decree that must be approved by the court. The proposed order would prohibit the defendants from using, obtaining or reselling consumer reports for unauthorized purposes. The proposed order also would prohibit the defendants from selling consumer reports in connection with solicitations for debt relief and mortgage relief services that charge advance fees.

The Federal Trade Commission (FTC), which oversees the FCRA, referred the case to the Department. The lawsuit, United States v. Direct Lending Source et al., was filed in the Southern District of California.

Acting Assistant Attorney General Delery thanked the FTC for referring this matter to the Department. The Consumer Protection Branch of the Justice Department’s Civil Division brought the case on behalf of the United States.

PS: Join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link:

The Best Agents Initiate Consistent Systems to Obtain Listing Leads

Posted by Joel pate in Leads. Tagged: , , , , , , , , ,

Well, all the sellers are taking “happy pills.” There are more FSBOs, and they are tougher to talk to now. What are my coaching clients doing right now?

They are setting up spreadsheets that help keep track of the information on all FSBOs in their respective market areas.

They subscribe to services like Landvoice and REDx to get lists of FSBOs.
They check their hometown newspaper and subscribe to the rags where the really cheap FSBOs might advertise.

They check all the FSBO websites regularly.

They have built a team of family, assistants, and affiliates who drive through town, always taking different routes. This team writes down all the FSBO addresses and phone numbers, and they pull brochures from the info boxes, if available.

They time-block this weekly accumulation of information for about an hour on Monday morning. Each of the affiliates knows to get his/her information in before that time frame.

Next, these agents carefully go through the ads and complete their spreadsheet columns. The columns would be the following: property address; situs address; owner name; 4 spaces for phone numbers with the first one being the one used in advertising; bedrooms/baths; square footage; extra rooms; garage space; lot size; basement; upgrades; best features of the home; email address, and special circumstances. Additional columns answer these questions: is the seller also a local buyer; in what city do they need an agent; why are they selling; and what date they have to close?

The first week of these activities will be tough, but it will get easier after that!

After the information is assembled for the week, a call is made to the seller. Let the seller know that you show your buyers more than just MLS property. If they tell you they won’t pay a commission, tell them that commission is taken care of by an agreement with the buyer via a buyer brokerage agreement. Complete any empty slots in the spreadsheet. Let them know you would like to send them articles and information that may help them, and let them know that you will call them after they receive the letter or email.

Send them a letter/email. Call on Thursday to follow-up on the value that you mention in the letter. Time-block it, or you’ll forget it.
On the next Monday, do it again. Send another letter/email to last week’s FSBOs and your last week’s letter to any new FSBOs for this week. Call the new ones on Monday to fill in your spreadsheet. With each call, you may be adding more information to your spreadsheet. Call everyone again on Thursday to see what value that has been mentioned in the letter that you can deliver to the FSBO.

Continue this process for twelve weeks, contacting new FSBOs each Monday, and following up with all the FSBOs on your spreadsheet on Thursdays.
Give copies of your spreadsheet to your buyer’s assistant(s) so that he/she can start showing the FSBO whenever they have a buyer who is even close. Make sure he/she leaves a lot of material with your picture and name on it plus mention your name liberally.

Pay special attention to especially nice FSBOs who take value from you, who have a clear reason for selling, and especially, who have a definite move-out date. “Special attention” means previews, personal consultation, pre-listing consultations, and sessions to show that if you use their closing date and work backwards that now would be the time to list.
Most sane FSBOs who need to sell, have taken help from you, talked with you, and have not yet sold should be talking about listing around the 7th week.

In the meantime, show the property to your buyers and earn commission. Talk the “sold” FSBO into being your buyer and earn commission. Send the FSBO as a buyer referral someplace in the world, and earn a referral bonus. Get the buyers to whom the FSBO didn’t sell and earn commission. Finally, build the FSBO into a raving client who becomes part of your database and earn money from the referrals and business after they have learned that being a FSBO is just no fun.

As I used to “own” this demographic, I’m proud to see my coaching clients dominating their individual markets’ FSBOs, too!

FSBOs have been an excellent source of saleable listings, and today’s “new” market makes that even truer. If you don’t have an active FSBO strategy, now is the time to implement one.

By: Walter Sanford,

Are You the Wheat or the Chaff?

Posted by Joel pate in Uncategorized. Tagged: , , , , , , , , ,

With interest rates on the rise, competition at every turn, and the economy continuing to struggle, mortgage originators who intend to succeed in our industry must separate themselves from the competition. Just as the wheat and chaff are separated during the harvest of grain, so too with rising interest rates; loan officers who are competent will be leaving those that are not in their dusty trail.

The most common question I am asked these days is “What will the industry be like as rates go up and the refinance market ends?”

Well, for those who sell rate, the opportunity to become an expert in our industry — while it is relatively easy to succeed with the busy refinance market — will be a brutal end to this opportunity of a lifetime.
To begin with, in any market, a mortgage professional who’s focus is on rate, quickly bumps into one of our two biggest competitors: loan officers who lie and loan officers who are not competent. I cannot match a deal that doesn’t exist — and you can’t either.

To be a truly great loan officer in any market one must know that rate doesn’t matter. Your advice as a professional loan officer and the benefit you bring to your customers are what matter. This not only matters, it’s critical for your competitive survival.

If rate did matter, then why did the most well-qualified borrower accept an 18% fixed rate loan in 1981? Two reasons: it was better than what he/she had, and it was the best that was available at the time. The same lesson applies to every situation in any rate environment.

Sell yourself, your advice, and customer benefits…not rate!

In the broadest terms, the three major benefits of financed real estate are the tax advantage, leverage and the inflation hedge that real estate provides.

Most loan officers understand the tax advantage of homeownership, but their knowledge and advice often stops there. When a borrower puts ten percent down on a property and that property appreciates at a five percent annual rate, the owner is enjoying a 50% annual return on their investment. Try doing that with any other investment vehicle!

The concept of an inflation hedge in even more dramatic and less understood. If one owns a property, that home is, hopefully, appreciating annually while the monthly payment is not. Mortgage payments are not subject to inflation. When one compares a person whose rent is subject to annual inflation, and the fact that they do not own an appreciating asset, the results are staggering. Even a reasonable rent payment, subject to average inflation, when compared to a modest purchase can mean the difference of over one million dollars in net worth over the life of a thirty-year loan! Do you know how to talk convincingly about these benefits?

And there are other benefits to consider. There is a huge benefit, for example, in shortening one’s loan term. I promote twenty-year loans which offer two-thirds the benefit term-wise, with only one third the price increase when compared to the price increase of a fifteen-year loan. The lifetime payout difference is almost unbelievable. There is too much debt in this country, and it’s all in the wrong place. Loan officers who think like financial planners and become their clients’ trusted advisors are literally changing the lives of their clients by providing better advice and education. There are a number of software tools available that can be used to quickly gain your clients’ trust and respect within minutes. They calculate equity acceleration, early principal payoff reductions, future values and the things that matter a lot more than rate.

Debt consolidation loans can offer monumental benefits. Imagine a borrower who is currently at a fifty percent debt-to-income ratio. You refinance him or her and bring the debt ratio down to forty percent. That borrower has been living on about twenty cents on the dollar after paying taxes on their gross income and servicing his or her existing monthly debt. When we reduce the debt ratios by ten percent we are putting ten cents right back in the pocket of the borrower every month. If they are living on twenty cents now, and we give them ten cents more each month, that is a fifty percent pay raise on their available income. Our industry is the only one that is giving people pay raises right now.

I don’t want this to sound like a sales pitch for Mortgage Coach, but they have a report that does this for you in minutes. Even if you don’t own the Mortgage Coach, you must find a way to professionally document and present this to your clients if you’re going to compete.

Sell yourself. My attitude is this: There is only one Fannie Mae and one Freddie Mac, and I’ve got them. If anyone can do it, I can. If I can’t do it, probably no one else can either. There is only one thing that I have that no other loan officer has and that’s what I need to focus on selling first. I sell myself.

One very easy way to sell yourself is to ask the borrower about a past experience. “Have you been through the process of a home loan before?” We all know that most people have. If a prospect has not, you have a chance to be first and first is always best, like Coca Cola and Kleenex! Most people have been through the process before however, so the next question should be “How did it go for you?” There will only be one of two answers and which one do you think is most common? “Not well”, is usually the answer I get.

Ask the prospect what happened, and then listen to their story. There will be no better chance to sell yourself and close right then than by saying, “I’m glad you decided to give me a chance to do better; I’m not going to let that happen to you. You’re going to like the way I do business. Now let’s get started!”

If the prospect happens to tell you that their last experience was a good one, (Why are they calling a stranger asking for the rates?), then you can still close by saying, “Well, I plan to work just as hard for you. You’re going to like the way I do business, too. Now let’s get started!” A great Loan Officer must be a closer.

In addition you can also tell them about your “keeping in touch,” or your “customers for life” program. (You do have one, don’t you?) Many loan officers don’t, so this gives you a tremendous opportunity to show your customers that your job really begins when their loan closes. On top of that, this makes their last loan officer look bad if they didn’t keep in touch.

At one time, I had a negative image of the word “closer.” I imagined the car salesman applying the pressure and tactics of his or her profession and was left with a bad feeling. A closer is a salesperson who takes the opportunity when it arises to stop talking and to move forward.

Too many loan professionals feel the need to over-educate their borrowers, giving them too many choices. When we give a borrower too many choices, we are requiring something of them, something that is the exact opposite of our goal. A loan professional’s goal with every prospect is to get commitment: The borrower’s commitment to work with you. When we give a borrower too much information and give them too many choices, we are requiring them to “think it over” — which is the polar opposite of commitment. “Think it over” is usually “no”. Be the confident expert and quickly lead them to a decision to do business with you.

There is a fine line when dealing with expert advice. You want to know that your medical doctor is knowledgeable, experienced and the best in their field. You don’t want to know all the details of everything they know; you just want the bottom line and the summary. You want them to present to you say, “This is my area of expertise; here are some key distinctions and, in your case, I advise the following.” That’s it!
If there is a single trait that all top producing loan officers share it is this: confidence. To exude confidence you must have competence. Invest your time and energy in getting as good as you can possibly be in this business and you won’t have to worry about getting commitment and selling yourself at all. The best mortgage loan officer is a man or woman who has all of the knowledge and skills, but because they are so polished and prepared, they seldom have to use them…or so it seems. In addition, they use that knowledge and skill to really care about each customer. They give so much value to each customer that, when it comes to referrals, they come in…almost automatically.

It’s a new season in the mortgage industry. The wheat will always be in demand while the chaff of our industry may soon be blown away.
Who’s in control of your business — you or the market? I haven’t met a top producing loan officer yet who wasn’t in complete, one hundred percent control of their business.

When all else fails, make contact with people who are interested in, or who will benefit by, borrowing money. What a concept!

By: David Reinholtz,

The Suburbs are Dead, Long Live the Suburbs

Posted by Joel pate in Uncategorized. Tagged: , , , , , , , , , , ,

Regular readers of The Atlantic Cities will be familiar with most of the social trends that Leigh Gallagher of Fortune magazine tracks to produce the title argument of her new book, The End of the Suburbs: Where the American Dream Is Moving. Population growth is on the rise in city centers (though total population still favors suburbs), Millennials seem less keen to drive than their parents were, urban home values are increasing faster than suburban ones. The list can and does go on.
What any interested reader will recognize, however, is how well Gallagher welds this enormous amount of data together. The result is a post-mortem worthy of the great American suburban experiment. Which, let’s face it, housed so many of us for so long — and which isn’t quite over, as Gallagher explains, but will never be the same again.

“I think I marshaled so much evidence partially because I knew I might get attacked, and partially because every stone I turned over yielded these beautiful flowers of evidence,” she tells Atlantic Cities. “It was really everywhere.”

EJ: You call the book The End of the Suburbs, but you add pretty quickly that it’s really just the end of the suburbs “as we know them.”
LG: It’s not that every single suburb in America is going to vaporize. My thesis is that there are a lot of reasons why the suburbs were poorly planned and poorly designed and are making millions of people really unhappy. That’s happening. Those people are looking for and moving into different kinds of options. Based on what’s happening with demographics and preferences of the younger generation, as you guys have well covered, those trends are just going to accelerate.

But to say that everyone wants to live in a 50-story skyscraper in New York City is not at all practical or realistic or in touch with how people want to live in this country. So a big part of the future will be “urban burbs.” Suburbs that are adapting or already exist in this fashion. Where they have a walkable downtown, a pleasant place to take a stroll and bump into people, and where it’s possible to live in closer proximity to the things you need to do every day.

EJ: You’re using “urban burb.” It has always struck me that we don’t really have a good name for these new urban-style suburban developments.

LG:I thought I was going to come up with a brilliant coinage that would get in the book and get me on the talk shows. I never came up with that. “Urban burbs” — they look like so many different things.

EJ: That gets to what you say at the very end: the American dream won’t be singular anymore. There will be different dreams.

LG: And they will be dreams. They won’t be houses. They won’t be buildings. Somewhere along the way the American Dream morphed from being a dream, an opportunity, to being a house. That’s no longer the case for a lot of people.

EJ: The developer Toll Brothers kind of exemplifies this larger shift in your book.

LG: Toll Brothers was the home-builder who perhaps better than any other really captured what the suburban home-buyer wanted before the housing boom.

Very early on, in 2003, they started a division called Toll Brothers City Living. They started with a few communities in Philadelphia and Hoboken, and over the years they’ve really doubled down, and doubled down again, and again. They have something like 30 buildings here in the New York City market alone.

At the same time, they’re also making changes to suburban homes. They’re still making the suburban homes they make, but it’s a smaller percentage of their overall mix. They’re tinkering with the “urban suburban” model as well.

EJ: Some people will argue that population growth is still heavy in the suburbs, but when you look at this demand of rental valuations and building projects in cities, those are clearly increasing.

LG: You have to look at the valuations, the rental demand, and even the way that properties are holding or losing their value. It’s reversed. Properties values fell further in the furthest suburbs than they did in the cities. Normally, in most recessions, that’s reversed. Things have fallen faster in the cities and held up better in the suburbs. That’s just one of so many reversals you’re seeing.

EJ: You say, at the end, that the suburbs “overshot their mandate.” What do you think that mandate should have been?

LG: The mandate was to give people an affordable place to live with good schools for their kids, where people could be part of a community and have a happy, meaningful life. It did that for a while. I talk a lot about my own suburban childhood. And it really was great. But the suburbs changed. They just got bigger and bigger and deposited people further and further away from their jobs and from other people.

EJ: The future you outline are these “urban burbs”-style developments where people don’t have to drive more than a mile or two and they can reach other urban burbs by transit. How close are we to that on a broad scale?

LG: We’re far away from being these network of nodes where everybody is hooked up to everyone else by public transit and we all read three hours more a day. We’re far from that. But the important thing is that people are recognizing that we can’t just keep doing what we’ve been doing. It’s not satisfying people. And it’s no longer meeting the market demand. Home-builders only react when they think the market wants something. And they’re starting to react.

By: Eric Jaffee,

9 Ways to Get Your Car to 200K Miles (or More)

Posted by Joel pate in Uncategorized. Tagged: , , , , , , , , ,

The average age of cars on the road today is higher than ever — over 11 years old, according to automotive market intelligence firm Polk. That’s partially a function of a slow economy, but also, Polk says, because vehicles are “more durable and more reliable than their predecessors.”
And with the average car adding more than 10,000 miles to the odometer each year, it’s practically a given that you’ll hit the once-notable milestone of 100,000 miles. In fact, you might even triple that without needing a big-dollar repair, such as a new engine or transmission.

But reaching those loftier targets requires some input from you, the owner. Squeezing maximum life out of your ride at minimum cost means being attentive to your car in a variety of ways. We’ve outlined nine here. Take a look.

Regular Maintenance is Crucial

There’s no getting around this one: A car that’s not regularly serviced won’t last as long as one that is. It might not even make it to 100,000 miles.

Regular maintenance is “the key to the automotive fountain of youth,” says Tom Torbjornsen, author of “How to Make Your Car Last Forever.”
What is regular maintenance? It’s what it says right there in the maintenance schedule of your owner’s manual, says Torbjornsen. Follow the “severe duty” schedule of more frequent servicing if your manufacturer specifies one.

But at a certain point, the manufacturer’s schedule may fail a high-mileage driver — as it sometimes lacks specifics beyond, say, 150,000 miles, other than to start over as if the car were at mile zero. “Can manufacturers truly believe that an engine with more than 50,000 moving parts — with 150,000 miles — is going to replicate an engine straight off the assembly line?” wonders Pam Oakes, a certified technician and author of “Car Care for the Clueless.” “What about a 180,000-mile engine? Would that have the same wear as an engine with 30,000 miles? I don’t think so.”

Like other experts we spoke with, Oakes recommends building your own maintenance schedule with a trusted, certified mechanic who knows you’re interested in going the distance.

Use Your Senses: Sight

If your routine is to plop into the driver’s seat in a darkened garage at one end of your trip and slam the door behind you in a darkened garage at the other end, it’s time to shake things up a little. “Do a ‘preflight’ at least once a week,” says Tony Molla, vice-president of communications for the National Institute of Automotive Service Excellence (and a certified technician with years of experience). “Walk around your car. Have your kid step on the brake and see if the lights come on. By spotting a problem now, when it’s small, you might save yourself more than just a ticket.”

Lauren Fix, an automotive analyst and host of the “Car Coach” segments on Time Warner Cable, suggests looking back at where you’ve parked every time you pull away. “Just take a second to look back and see if there are any fluids left behind. If there are, next time park on some cardboard, and you’ll know where it was coming from,” says Fix.

Use Your Senses: Sound (and Touch)

Though your sight is the most important sense when driving your car, hearing may actually be the most important one to keeping it running. A car that sounds like it’s falling apart probably will soon.
What you’re listening for is anything out of the ordinary. “Any bump, squeak, knocking, ticking? Don’t turn up the radio — turn it off! At what speed does it happen? That’s a really important piece of information you can give to your mechanic,” explains Fix. “If you can guide a technician with that information, you will save them hours of trying to track something down.”

Use Your Senses: Smell

No, really, your nose can help you head off problems that could endanger your run for 200,000+ miles. When you’re checking the oil, counsels Fix, give it a sniff. If it smells burnt, that could be a sign that your engine is running too lean (not using enough fuel). Fixing this condition could save you from a costly engine rebuild.

Smell can also come into play if your car has a dipstick to check the level of the automatic transmission fluid (not as common as it used to be). If that fluid smells burnt and nasty, it’s also a bad sign. (We’ll discuss more about stinky transmission fluid later.)

Say No to Short Trips

If there’s one single thing you can do as a driver to get your car to last longer on its original parts, it’s to drive it less — specifically, on trips where the engine doesn’t have a chance to reach operating temperature.

Here’s what happens: Water is a byproduct of engine combustion, and some of it gets into your car’s oil and exhaust system every time the engine runs. Also, when your car is first started, more fuel is mixed in to get it running.

On a longer trip, your car’s engine gets hot, and the water and unburned fuel are boiled out of the oil, your engine and your exhaust — no worries there. But a short trip won’t do that, allowing the water and oil to eventually turn into noxious sludge that eats away at your motor. So, how short is too short? It varies by temperature and how you drive, but AAA defines it as “trips of less than five miles in normal temperatures, or less than ten miles in freezing temperatures.”

Tony Molla, of the ASE, faces only a three-mile commute to work but often drives longer. “I go out of my way,” he says. “I take the long way in the winter to make sure the engine gets up to operating temperature. That way it burns off the nasty stuff that can build up in your crankcase.”
Try to combine your short trips into a single run. And, for Pete’s sake, don’t park in front of the garage and then pull the car in when you’re going to bed. That’s a short trip to the junkyard.

Use Synthetic Oil

Nothing gets motorheads more riled up than the question of which oil to use and how often to change it. But few will take the stand that synthetic oil isn’t better than the petroleum-based stuff.
Synthetic oil is more expensive, no doubt — up to four times as much as regular. But think of it as insurance against the cost of an engine rebuild. Note that more manufacturers are specifying synthetic oil, particularly in performance models. And if your engine is turbocharged or supercharged, definitely go with synthetic to handle the higher thermal stress. All the experts we spoke to are big fans of synthetic products, not just engine oil but also other fluids in your car, such as the transmission fluid.

Change the Transmission Fluid

If changing the transmission fluid and filter is specified in your car’s maintenance schedule, well, then, take care of it.

But what if no replacement is specified? Increasingly, car manufacturers are either just indicating that the fluid should be checked at intervals or assuring you that the fluid is “lifetime.” To which we ask, how long is a lifetime?

If you’re looking for a long lifetime, plan on replacing the transmission fluid at least by 100,000 miles (and there’s no harm in doing it earlier).
Note that there’s considerable controversy about whether it makes more sense to “flush” your car’s transmission fluid or have the pan on the bottom of the transmission removed and cleaned out. Flushing allows all of the old fluid to be removed but doesn’t do anything about the (possibly dirty) filter inside your transmission. Dropping the pan will get out any sludge that collected in it and will usually entail a new filter, but less old fluid will come out — and less fresh, new fluid will go in.

Our counsel: Never do a flush without replacing the filter first. That’s what the Automatic Transmission Rebuilders Association recommends.
And if you have stinky transmission fluid? Your transmission is already cooked and on its last legs. Flushing it, warns radio host Torbjornsen, will only accelerate its demise by introducing new fluid whose detergents will dissolve whatever’s still holding together in there.

Keep Your Car Clean

Just as you keep the fluids in your car’s critical systems fresh and clean, you should keep your car’s exterior clean. Washing road salts and other environmental nasties off your paint and undercarriage at regular intervals will forestall corrosion and faded paint. If your car is going to run a long time, it ought to be nice enough to look at.

But getting up close and personal is also about looking for small problems that could lead to costlier repairs. “Wash your own car,” insists Molla. “Get down on your hands and knees. You’re going to notice things like cracked lenses, where water is going to get in and cause your expensive headlight assembly to fail.”

Be Prepared to Replace Bearings and Bushings

It’s a given that you’ll be replacing what are known as “wear parts”: tires, brake pads, timing and accessory belts, and shock absorbers. But as you head for the land of six-figure mileage, there are some other parts you should be looking to replace before they fail. Tackle these fixes proactively to avoid larger repair bills that might lead you to give up on a car before its time.

Lauren Fix specifically recommends looking at your suspension bearings and bushings — metal and rubber bits, often doughnut-shaped, that isolate your suspension from the rest of the car and dampen noise. If they’re allowed to deteriorate and break, “it could affect the alignment of the car, and that can affect the life of the tires and cost you money.” The regular inspections you’re having done (right?) should pick up a bushing going south, but if you’re replacing your shocks and struts, consider having all the bushings done at the same time.

The importance of replacing timing belts, which ensure that your engine’s valves open and close at precisely the right time, was also driven home by our experts. And when that belt’s being replaced, suggests Molla, go ahead and get the water pump replaced, too, even if it hasn’t failed.
On many cars, he explained, the labor cost of reaching both of these parts is high, but the parts themselves are relatively cheap, “so it’s worth it to replace them at the same time” to save on labor.

By: David Muhlbaum,

SoLoMo Marketing is a Big Deal

Posted by Joel pate in Home Builders, Mortgage Loans. Tagged: , , , , , , , , ,

How are you connecting with homebuyers and sellers? Are your advertising dollars going into a black hole or into the honey hole? recently polled real estate professionals and consumers to determine home search habits, marketing trends and their respective perceptions of local housing conditions. This insight and infographic will help real estate pros evaluate their SoLoMo (Social Local Mobile) marketing strategies to better target potential clients and drive traffic back to your business.

Word of Mouth Recommendations Still Carry the Most Weight

No surprise here: Both real estate professionals and consumers chose personal, word-of-mouth recommendations as the top means by which they connect with one another. In this day and age of technology, an old-fashioned, genuine recommendation from a trusted friend or family member is the primary source when deciding on a real estate professional.
This goes to show that building and maintaining authentic relationships with your clients is still paramount. To build and compliment your endorsement library, focus on building a strong presence in your local market by collecting and promoting client endorsements on your websites and social channels.

Since first impressions are always the most important, provide them with really unique marketing materials and professional, well-designed listing presentations to demonstrate that you are the person for the job.

National Real Estate Sites are Paying Off

Forty-seven percent of real estate professionals are spending the majority of their marketing dollars on national real estate listing sites (i.e., and®).

This has proved to be a valuable investment, since 67 percent of consumers prefer these sites when searching for homes via their desktop or mobile device. Furthermore, the majority of real estate professionals report that these sites provide them with the most quality leads and are also their primary source for sharing testimonials (i.e., “word-of-mouse”).

Join the others who have already reaped the benefits of using online resources and create an agent profile to increase your visibility, tell your story and share your praises.

Social Media Promotions Lead to Conversions

Real estate pros reported that social networks were their top choice for promoting client endorsements, listing videos and pictures. In fact, a whopping 75 percent of real estate professionals say that they are actively using Facebook to promote all aspects of their business! Social channels are a great place to promote client endorsements since 71 percent of consumers are more likely to make a purchase based on social media referrals, so maintaining your online visibility will be key to a larger return in building your business.

Mobile Marketing is a MUST

If you’re not mobile yet, you’re simply missing out — big time. Mobile web access is projected to overtake that of desktops by 2014, so it’s imperative that you start advertising here and formatting your marketing materials for mobile viewing. This is especially important when targeting local business, since 94 percent of smartphone owners are searching for local information and 73 percent of these mobile searches trigger follow-up actions. Further, three-quarters of the homebuyers and owners polled in the survey prefer to be contacted by email — most of which are accessed on a mobile device. That said, be sure that your email campaigns are formatted for easy viewing on smartphones.

Understanding Local Market Conditions Makes You an Expert

Local market outlooks give you the opportunity to understand the amount of confidence consumers have in their respective housing markets. We found that 54 percent of homeowners believe that their home values have increased over the last twelve months. To help clear up uncertainties about the state of their local real estate market and to minimize any hesitation to purchase or sell a home, provide your clients and prospects with detailed market reports in your listing presentations, email campaigns and blog. Proving that you are the local expert will give them just another reason why they should feel comfortable working with you for their real estate needs.

While no marketing technique guarantees success, understanding what consumers are looking for during their home search is pretty obviously the best way to drive traffic back to your business. Bottom line, SoLoMo reigns! So invest your time on social networks; make it happen on mobile to engage with local consumers!

Checkout out all the findings from the Real Estate Marketing Trends Survey for an even more in-depth look at what you can do to turn your next prospect into a client. Click here to see the results:

By: Erica Campbell Byrum,

MMRecap for Oct. 7th

Posted by Joel pate in Uncategorized. Tagged: , , , , , , , , ,

Stocks slid last Monday morning as the government prepared for a shutdown. It happened, of course, at 12:01 a.m. Tuesday, when Congress failed to pass legislation that would provide the government with funds to begin the fiscal year.

The only economic news showed the Chicago PMI index on manufacturing beating estimates. It came in at 55.7 in September, rising from the previous 53.0. More than that was needed to pull stocks into positive territory. The 10-year yield, which moves in inversely to price, edged up a couple of basis points to 2.64%. But when the bond markets closed it was back down to 2.60%.

When the NYSE closed, the Dow Jones took the biggest hit, falling 129 points, or 0.84%. It was followed by the S&P 100, which slipped 0.60% and the Nasdaq, which closed down 0.27%.

Tuesday morning, however, one would never know anything was amiss. Stocks were up; the 10-year yield jumped a couple of points. The ISM index on nationwide manufacturing conditions climbed to a better-than-expected 56.2 in September from the previous 55.7.

But the report on construction spending in August was delayed. That was a mere inconvenience, when you compare it to some 800,000 federal workers who have been or may be furloughed without pay.

Although some stocks came off their highs, they still did well. Once again, the Nasdaq gained 1.23%, while the S&P 500 closed 0.80% higher. The Dow rose 62.03 points, but added only 0.42%.

Wednesday morning investors were more nervous about the effects of the government shutdown. They headed toward the safe haven of Treasuries, pushing the yield on the 10-year note down four basis points to 2.61% in the early going. Stocks gave back Tuesday’s gains and then some.

Treasury Secretary Jack Lew noted that the government is running out of options that would insure it stays below the debt ceiling. Several CEOs of major banks also urged President Obama not to do anything that would hurt the nation’s economic recovery. They said the long-term consequences of a shutdown would grow “extremely adverse” if the U.S. fails to raise its debt ceiling.

The only report Wednesday, released by payroll processor ADP, showed that 166,000 jobs were added to nonfarm payrolls in September. That was below expectations, but since the employment report will be delayed its importance was moot.

When the markets closed, the 10-year yield had added two basis points, for a final reading of 2.62%. Stocks shed some of their losses but landed in negative territory. The Dow dropped 58.56 points or 0.39%, while the Nasdaq and S&P 500 were down 0.08% and 0.07%, respectively.

First-time jobless claims for the week ended Sept. 28 came in Thursday at 308,000 — 1,000 more than the previous week. Those furloughed will be able to apply for unemployment benefits during the week ended Oct. 12 and the number of claimants could spike to 1.1 million. Curiosity prompted a check as to why first-time claims were released and the September employment report was delayed. The answer: Claims are a product of the Department of Labor, but the monthly employment report comes from the Bureau of Labor Statistics. Its staff of 2,400 was pared down to three.
The ISM index on services plunged to 54.4 from 58.6 — far below estimates.

When Treasuries closed, the 10-year was at 2.62%. Stocks were a different story. Both the Dow and the S&P 500 dove 0.90%, while the Nasdaq, which usually escapes with the smallest loss, fell 1.07%.

On Friday stocks rebounded in spite of some pretty scary words being thrown around in the press, such as debt ceiling, default and recession. Even though stocks didn’t erase Thursday’s horrendous losses, they gave it a shot. The Dow jumped 76.10 points, or 0.51%, while the S&P 500 added 0.7%. The Nasdaq came closest to retrieving the previous day’s loss, rising 0.89%.

The Mortgage Bankers Association reported that applications for the week ended Sept. 27 fell 0.4%, while applications to refinance rose 3.0%. The purchase index dropped 6.0% versus the previous week and was down 3.0% from one year ago. The contract rate for a conforming 30-year loan was 4.49%, the lowest since June 13.

This week there’s not a whole lot happening until Wednesday. No economic reports are due today, and Tuesday’s release on the trade balance for August is generally ignored. The same can be said for Wednesday’s August release on wholesale inventories. Depending on the status of the government, these reports may or may not be available.

Wednesday afternoon, however, could be interesting. That’s when the Fed will release the minutes of its September 28 meeting. While this meeting was expected to provoke angst regarding what the Fed will say about any changes in its MBS/bond buying program, the subject has not come up. Apparently, concerns about the government shutdown and the upcoming debt ceiling debate have shoved the question regarding quantitative easing from first class back into coach.

A report on first-time jobless claims for the week ended Oct. 5 is scheduled for release Thursday morning. The other report, import and export price indices for September are scheduled, but they are not market movers. And depending on the status of the government, they may not be released.

Friday could also be interesting. Retail sales in September should rise 0.2%, as they did in August. Excluding auto sales, however, they could leap 0.4% from 0.1%, which would be a positive for stocks. This report is released by a government agency, as is the producer price index, so at this point there is no certainty that these reports will be available either.

The September producer price index, or PPI, is also on the docket. It tracks inflation on manufactured items and is expected to show a 0.2% increase versus 0.3% in August. The core rate, which eliminates food and oil prices, is the one the Fed watches. It is expected to edge up to 0.1% from 0.0%. Business inventories in August should edge down to 0.3% from 0.4%, but this data does not move the markets.

The other influential report, the October Thomson-Reuters/University of Michigan preliminary release on consumer sentiment, will be available, as it is generated by the private sector. It is forecast to rise to 78.2 from 77.5. That’s not huge increase, but will it affect the 10-year yield? It could add a point.

How the VantageScore Credit Report is Calculated

Posted by Joel pate in Credit Report. Tagged: , , , , , , , , ,

Since the 1970s, credit scores have played an increasingly vital role in the lending industry. Fair Isaac and Company began assigning credit scores to consumers based upon various factors over 40 years ago, and these scores are now reviewed not only by prospective lenders, but also by landlords, insurers and governmental agencies.

But the computation process for the FICO score has some limitations; for example, a consumer has to have a credit line open for at least six months before it will show up on a FICO credit report. This and other deficiencies have led the three major bureaus to establish a new credit score model known as VantageScore, which evaluates customers according to a somewhat different set of criteria that can be much more forgiving in some instances.

A Collaborative Effort

The three major credit bureaus have used the FICO scoring model for decades, but the differences in how each agency computes its scores has led to numerous discrepancies that are often problematic for both lenders and consumers. The VantageScore model is designed to provide a much more standardized grading system than the one used by Fair Isaac and Company. The first version of Vantage appeared in 2006, followed by Vantage 2.0 in 2010, which was modified in response to the changes that swept over the lending industry after the Subprime Mortgage Meltdown of 2008.

The VantageScore Model Methodology

VantageScore credit scores are computed in a fundamentally different manner than FICO scores. They start with a somewhat different set of criteria than FICO and also assign a different weighting to each segment. A comparison of the two is shown as follows:

FICO Score:

The Consumer’s Payment History: 35%
Total Amounts Owed by the Consumer: 30%
Length of the Consumer’s Credit History: 15%
Types of Credit Used by the Consumer: 10%
Amount of the Consumer’s New Credit: 10%


Amount of the Consumer’s Recent Credit: 30%
The Consumer’s Payment History: 28%
Utilization of the Consumer’s Current Credit: 23%
Size of the Consumer’s Account Balances: 9%
Depth of the Consumer’s Credit: 9%
Amount of the Consumer’s Available Credit: 1%

The VantageScore model is also quantified differently than FICO scores. It still uses a numerical range for its scores, but it also assigns a corresponding letter grade for a given range, in some instances, that helps consumers to understand the quality of their score. The grade is statistically based upon the ratio of consumers who are likely to charge off versus those who will pay on time. The VantageScore system is broken down as follows:

901 to 990 = A – 1 charge off for every 300 consumers who pay on time
801 to 900 = B – 1 charge off for every 50 consumers who pay on time
701 to 800 = C – 1 charge off for every 10 consumers who pay on time
601 to 700 = D – 1 charge off for every 5 consumers who pay on time
501 to 600 = F – 1 charge off for every 1 consumers who pay on time

As with FICO, the consumer’s creditworthiness matches his or her score and grade. Each of the three major credit bureaus computes a score based on the VantageScore model using its own data. Of course, while all three bureaus use the exact same model to compute the VantageScore credit score, it can still differ from one bureau to another because each bureau typically records slightly different information in their consumer files.

The VantageScore Benefit

One of the chief advantages that the VantageScore model brings is the ability to provide a score to a large segment of consumers (about 30 to 35 million) who are currently unscorable when traditional methodologies are applied. The VantageScore model differs from FICO in that a line of credit only has to be open for a single month in order to be factored in, yet this model takes 24 months of consumer credit activity into account, whereas FICO only looks back for six months. The longer look-back period can be a big help for consumers who are working to rebuild their credit and are able to show a marked improvement over the longer time span. The VantageScore credit score is also designed to serve as a “predictive score” for those with thin credit histories by indicating the probability that they will meet their future payment obligations in a timely manner. It can also use rent and utility payments in its computations if they are reported by the landlord and/or utility provider.

VantageScore 3.0

The most recent version of the VantageScore model represents a substantial improvement over the previous two models. It was created beginning with over 900 data points from 45 million consumer credit files spanning two overlapping time frames from 2009 to 2012. However, it only uses about half the number of reason codes (which signify various reasons why the consumer’s credit score carries the number that it has been assigned), and these codes have been rewritten in plain language that consumers can easily understand. VantageScore Solutions, the company behind the model, also provides an online resource where consumers can look up their reason codes, which can be found at

As mentioned previously, the risk assessment formula that is used in the model is now identical for each of the major bureaus because it employs uniform definitions for consumer payment and credit information that is received by each bureau. The VantageScore model also claims that the predictive score in this version will be 25% more accurate than the previous one due to the substantial increase in both the quality and quantity of data upon which the model is based.

Impact with Lenders

Despite the hype with which the three credit bureaus have promoted their new scoring system, it has been slow to catch on in the lending industry. The VantageScore model remains a very distant second to the traditional FICO score in the amount of market share that it has carved out among lenders. As of April 2012, less than 6% of the credit scoring market and only 10% of the major banks use the VantageScore model in their underwriting.

The Bottom Line

Although its method of computation is considered to be more fair and realistic than the FICO model, it will likely take some time for lenders to become comfortable with shifting to this alternative methodology. Nevertheless, the number of institutions that accept the VantageScore model is growing, and its popularity will likely continue to increase with its ability to tap a new market of potential lending customers. For these reasons, the major credit bureaus continue to view VantageScore credit scores as a model for the future.

By: Mark P. Cussen,