Why Do Mortgage Companies Do Better Modifying the Loans in Their Own Portfolios?

There are two offices in Washington that work together to put out a comprehensive report on mortgages in the United States. These are the Office of the Comptroller of the Currency and the Office of Thrift Supervision.Their report is the Mortgage Metrics Report. In this report they track closely the number of loans where people are facing foreclosure and who are offered loan modifications and how successful these modifications are.They look at the mortgages of nine national mortgage companies and three large thrifts. These twelve are responsible for 64% of the mortgages in the United States.Their report is a quarterly report. Because the volume of loans is so great their report normally is finalized and released three months after the end of a quarter. Their most recent report was released in September of 2009 and covered the second quarter of 2009 which ended June 30, 2009.There are numerous charts in this report. One interesting chart in the report for the second quarter of 2009 focuses on the percentage of people who default again on their loans after a loan modification was made. These are people who had their loans modified and were facing foreclosure again because they did not continue to make their modified payments.The chart monitors 5 investors – Fannie Mae, Freddie Mac, Government Loans, Private loans and Portfolio loans. The nine national mortgage companies and three large thrifts service loans for Fannie Mae, Freddie Mac, the government (FHA and VA) and Private investors. Portfolio loans are those that the mortgage companies and thrifts have put up the money for from their own funds. They keep these in their own portfolio rather than selling them to one of the other four investors.Here are some interesting items from the chart:· Anywhere from 27.7% to 34.4% of people whose loans were modified for the other investors had failed to continue to make their mortgage payments 3 months after the loans were modified. Only 14.0% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.· 40.2% to 49.8% of the people whose loans had been sold to the other investors and whose loans were modified had failed to continue to make their payments on time after 6 months. Only 28.7% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.· The percentage of people whose loans had been sold to other investors and who had failed to continue to make their payments after nine months was between 49.8% and 58.3%. Only 38.7% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.· The percentage of people whose loans had been sold to other investors and who had failed to continue to make their payments after twelve months was between 52.4% and 59.1%. Only 42.4% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.None of the loans being tracked in this chart are loans where modifications were made under the Making Home Affordable Modification Program.For each investor the percentage of people who fall behind on their payments and face foreclosure again increases the further they are from the date their loans were modified. A closer look at this shows that the percentages are fairly close and consistent for each of the investors except the Portfolio investor.The percentages of people who are facing foreclosure again in the Portfolio category after 3, 6, 9 and 12 months are significantly lower than the percentages for the others. In the Mortgage Metrics report it is suggested that this may be due to differences in modification programs and the investor’s flexibility to modify the terms of the loan.There May Be a Totally Different ReasonPortfolio loans are those kept by the mortgage companies and Thrifts studied in this report. These are loans in which these companies and thrifts invested their own money. The other loans they have sold to Fannie Mae, Freddie Mac, the Government (FHA, VA, etc.) and Private Investors on Wall Street. While the monthly payments are made to the mortgage companies and thrifts, they just pass it on to the end investor.These mortgage companies and thrifts lose more money on loans in their own Portfolio that end up in foreclosure than they do on the loans they have sold to everyone else. It looks like modifications they are making on the loans in their own portfolios are more favorable than the modifications they are making on the loans of other investors.Is There Anything in the Report to Support This?There just happens to be another chart in the report which implies that the mortgage companies and thrifts are doing this. This chart shows the types of loan modifications that were done during the second quarter of 2009. Here is what that chart reflects:· The mortgage companies and thrifts reduced the interest rate on the loans they modified in their own portfolios 84.1% of the time. This was higher than any other group. The interest rates were modified 77% of the government loans. Interest rates were reduced on 43.6% of the Fannie Mae loans modified, 51.3% of the Freddie Mac loans modified and 63.6%of the private investor loans modified.· The mortgage companies and thrifts extended the durations of the loan to recover any reductions in payment on 72.4% of their own loans. They extended the term on 77.6% of the Freddie Mac loans. The percentages of the rest were lower – 47.8% of the Fannie Mae Loans, 46.4% of the Government loans and 13.1% of the Private Investor loans.· The mortgage companies and thrifts reduced the principal balances on 30.5% of the loans they modified in their own portfolios. They did not reduce the principal balances on any loans for other investors.· The mortgage companies and thrifts deferred a portion of the principal due on 4.7% of the loans they modified in their own portfolios. They only did this 0.1% of the Fannie Mae loans. There were no principal deferments on any loans for any of the other investors.· The mortgage companies and thrifts only froze the existing interest rates on 5.5% of the loans they modified in their own portfolios. The percentages on loans where they froze the interest rates on loans for the other investors ranged from 5.9% to 16.6%.Let’s define these terms.· Rate Reduction – The interest rate on the loan is reduced.· Rate Freeze – The interest rate on the loan is frozen at the level it was at.· Term Extension – The length of the loan was extended to recover any reductions in payment.· Principal Reduction – The amount still owed on the loan was reduced.· Principal Deferral – Some of the money owed was deferred to the end of the loan.This chart clearly indicates that during the second quarter the mortgage companies and thrifts took action to give more favorable modifications on the loans in their portfolios than on the loans they sold to the others. This is clearly indicated by the fact that they reduced the interest rates on 84.1% and extended the terms on 72.4% of their loans. They also reduced the principal on 30.5% and deferred the principal on 4.7% of their loans.The surprising thing here is the 30.5% principal reduction on the loans in their own portfolios. The mortgage industry has consistently fought against legislation proposed in congress to give judges the power to do this. Yet they are doing it on their own loans.The mortgage industry has been lobbying that loan modifications don’t work. They regularly say that while modifications may temporarily postpone a foreclosure, the majority of people will fall behind on their payments and face foreclosure again. Yet these charts don’t show that. They show that almost 60% of the people facing foreclosure whose loans are in the portfolios of the mortgage companies and thrifts have been able to stay current on their modified mortgages twelve months after they have been modified.It looks like more pressure needs to be placed on mortgage companies to modify all loans in the same manner as they are modifying those loans in their own portfolio.

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Is Your Small Business Using Internet Marketing Strategies to Attract Customers Like a Magnet?

Smart business people are leveraging the power of Internet marketing strategies to attract more qualified customers to their small business. Small Businesses that you would not expect to find on the Internet are now using online marketing to draw in customers like a magnet. Traditional small business marketing methods are expensive and the results are not measurable. Positioning yourself as the expert in your field and providing valuable information to your potential customers will magically attract qualified prospects to you. This article will provide valuable small business marketing ideas to help you develop marketing strategies for your small business.My time is limited, and I have found that using the search engines is a great way to find products and services that meet my needs. The information available on the Internet lets me compare products and services and get reviews from other customers who have purchased the products I am looking for. Last week I purchased a generator for my home through the Internet, and I needed to find a local electrician to install it.   I hate calling people from the yellow pages, so I decided to search the Internet for someone who could help me. I found three different electricians. Electrician A had very good information on their website about some simple electrical jobs and things to watch out for when picking an electrician.   Electricians B and C simply had a “yellow page” website with a phone number and address. Because Electrician A had shared valuable information with me first, I already trusted him more, but I wanted to get three bids to make sure I paid a reasonable amount of money for my job.I sent all three electricians an email asking for a bid on my job. Then I spoke with each of them on the phone to answer their questions and give them directions to my property.Electrician B bid on the job sight unseen. Electrician A and C both made time to come out to my property and look over the job before bidding.Electrician A made a couple of good suggestions that actually saved me money and helped me avoid a costly mistake. Electrician C bid almost twice what the other two electricians did. After getting all of the bids, I chose Electrician A because he took the time to come out and look over my job, and actually helped me save money, even though he did not have the cheapest overall bid. Electrician B, who bid on my job sight unseen, had the lowest bid, but would have actually cost me more money because of the issues that Electrician A had pointed out when he took the time to come out to my property to see the job before bidding on it. Electrician C looked over the same job site as electrician A, but did not give me a lot of confidence when he did not point out the same issues that Electrician A had.  The combination of a website with valuable information to help build my confidence coupled with free advice to help me save money actually won this electrician my business. This is an example of how effective marketing a small business using the Internet coupled with a consultative sales approach can help attract and win customers for your business. Because of their power to attract customers, I have implemented these Internet marketing strategies in my own small business. I have a website that has valuable information available to the prospective customers who search for my services. Because of this useful information, the customers who find me already trust what I have to say. They know something about me before we even speak with each other. This helps filter out the tire kickers and helps me leverage my time to work with only those customers who truly have an interest in my services as a small business Internet marketing coach.By reading this article you’ll learn why it is important to market your small business on the Internet. You will learn small business marketing ideas that will attract more customers to you who are already interested in what you have to offer. You will learn how to gain the trust of these customers allowing you to win more business and make more money.Why it is so important to market your small business on the InternetMore than ever, people start their search for information about products and services on the Internet. In fact, as a business medium, the Internet is growing while many other sectors of the economy are declining. Your customers are looking for you on the Internet…trust me I know this. The question is “are they going to find you when they search?” and if they do, “will they learn enough about you to trust you and contact you to do business?”  Many people no longer think of the yellow pages when they are searching for information about a product or service. The major search engines are the most accessed websites on the Internet. Google has over 91 million searches per day, and Yahoo has over 60 million searches per day, together they represent 151 million searches per day. Now the population of the United States is just over 304 million and the population of the whole world is just over 6 billion (Wikipedia – Jul 2008). One out of every two people in the United States could be searching for something or one out of every 40 people in the world could be doing the same. This is a staggering number of searches every day, which reinforces the fact that people are relying on the Internet to search for and find quality information. You can see why, more than ever before, it is important to have an Internet marketing strategy for your small business.How to attract more customers to you who are already interested in what you offerOk…so now we can agree that your business should be on the Internet, but how can you be sure that your business will be found out of all of the others out there? How can you effectively market your small business on the Internet? Probably not the way you would think. Hype-based or hard selling techniques no longer work. The way to attract customers to you is to offer valuable free information to the people who find you.   They will find you because you will use the same words that people are searching for when describing your products or services. This is called search engine optimization (SEO) and all it means is that when you write the content for your website or blog, you use the words that people are typing into the search engines so that they can find you when they search. If you are using a replicated website, it is very likely that it has not been optimized to be found by the search engines. Search engines hate replicated websites.Your small business marketing strategy should include writing articles about topics that are interesting to your customers. To do this, you have to figure out who your target customer is, and what they are interested in. This is probably the hardest part of your small business marketing strategy. This is the essence of attraction marketing and is how you will build an audience for your information, which in turn will draw customers to you like magic. Then it is just a matter of placing your content all over the Internet so that it is found when your customers search. If you are a local business, there are ways to localize your content, so that customers in your geographic area can find you first before you competitors when they search.How the value you provide helps you gain the trust of your customersOnce your customer types in the search words at the search engine and your content comes up, you have started building trust and credibility in their minds. The more valuable the content you offer for free, the more trust you will build. The more frequently your content comes up, the more credibility you will gain. Securing the trust of your customers is the hardest step in making the sale. Using these small business Internet marketing strategies does this hard step for you, so that when your customers come to you, they are ready to learn what you have to offer. If the valuable free content that you offer is perceived to be more valuable than that of your competitors, you will differentiate yourself in the eyes of your prospective customer. If your content comes up first on the search engines, you are guaranteed that your customer will see what you have to offer. If what you offer is of value, you have just won a customer.You too can leverage these ideas for marketing your small business on the Internet There are many tools that you can leverage today for your small business marketing strategies. Some of these include websites, blogs, articles, images, Google maps, videos, etc.  In addition to these, there are many social media options to help build your reputation with your customers. These include such things as Face book, MySpace, Squidoo, and Twitter.For example, my small business has a website which I use as the hub of my business activities. I have written articles, such as the one you are reading, which are found by the search engines when my target customers type in certain search words. My articles then link back to my website for my customers to find more information about my services. In addition to my articles, I have Squidoo lenses, and a Face book page which also link back to my website. My offline marketing also has the link to my website. Again, the target of all of my marketing is to drive prospective customers to my website where they can prequalify themselves by learning more about my business and requesting more information if they are interested. Notice, I am not chasing customers, nor am I wasting my money on the yellow pages. Instead, I am attracting customers to me through the valuable information that I provide. You can easily implement these same marketing strategies for your small business also.If winning more business and making more money is important to you…If all of this information is a bit overwhelming to you, or you just don’t know how to get started, I suggest that you find someone who can guide you through developing and implementing the Internet marketing strategies for your small business. Find someone who can show you the ropes and teach you what you need to know to be self-sufficient.Don’t just sign up with anyone who claims to build or host websites, though. Not everyone knows the secret of attraction marketing like I have described for you here. Find someone who understands these concepts and has demonstrated their ability to apply them the way that I have demonstrated it to you when you found this article. When you do find someone, the more they know the more costly their time will be.  Look for someone who knows just a little more than you but who isn’t so good at it they charge you a fortune. They can show you how to set up your small business marketing strategies on the Internet, or if you don’t have the time to do it, they can do it for you. Now you know how to easily win more business and make more money. Leveraging an Internet marketing strategy will help you with the hardest part of establishing any business relationship. It will help you gain the trust of your potential customers before you have even spoken with them yet. You will be able to attract more customers to you, and the ones you attract are already interested in what you have to offer. After that, all you have to do is offer great service and close the sale. These great small business marketing ideas can give you a leg up on your competitors, and help you grow your small business.   Now you know why it is so important for you develop an Internet marketing strategy for your small business. As a customer, I have found that small businesses who provide valuable information to me when I am searching for products or services are much more likely to get my initial inquiry about their products or services.  Businesses who are not on the Internet or who have a replicated brochure website are usually not in the running at all. In fact, I usually forget to even look in the yellow pages. My first stop to search is now the search engines like Google or yahoo. I have implemented these small business marketing strategies in my own consulting business. Now I have customers calling me, instead of me trying to chase them or spending thousands of dollars on ads that don’t bring in anyone. Give me a call or shoot me an email and I’d be happy to spend 20 minutes on a free consultation with you to get you started on the right track.

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5 Tips for Buying an Office Chair for the First Time

Since office chairs come in a lot of styles, shapes, and materials, making a choice can be quite overwhelming. For instance, some of them are made for accessional use, while others are more suitable for routine use. Aside from this, there are other factors to consider, such as price, finish, color, and style. Given below are some tips to help you make a better choice.

1. Consider your usage

These units are designed for a variety of purposes. For instance, if you get an executive chair, it will allow you to talk to your senior employees comfortably. On the other, if you are suffering from back issues, it is better that you opt for a chair designed to make your back feel comfortable. Basically, these units are designed in order to provide more support for your back and body. The good thing is that you can adjust these chairs based on your sitting posture.

If you are a heavy computer user and spend a lot of time working on your computer, we suggest that you consider an ergonomic chair.

2. Consider your desired parts

The majority of office chairs have some common major components such as armrests, the seat, and the backrest. For backrest, it all boils down to the lumbar support. Ideally, it should match the natural curve of your back so that you can relax your lower back. It is even better if the chair allows you to recline without any problem.

Another important component is the seat. Make sure that the edge of the seat is rounded and downward-sloping. This will help improve blood circulation to your legs. If you are a heavy, tall person, it is better that you go for a chair that features higher backs and wider seats.

While typing, armrests allow you to place your hands comfortably. Apart from this, an adjustable armrest is another great feature to have in your desired unit.

3. Consider the adjustment features

You should adjust the chair to perform your desired task without suffering an injury. It is easy to adjust the mentioned components using levers and knobs while you are sitting in the chair. For example, the chairs of today feature a lot of mechanisms, such as tilt angle control, adjustable lumbar support, and adjustable height control. Make sure that the unit you are looking for allows these adjustments.

4. Consider the material

If you go for an upholstered unit, you can enjoy a cushioned seat and a lot of color and style options. Apart from this, synthetic fabrics with stain resistance offer a higher level of durability. On the other hand, leather is known for comfort and durability. If you are looking for something easy to clean, faux leather is your best bet.

5. Consider the environment

Based on the type of floors you have in your workspace, you should decide on the dimensions, colors, and styles of the chair. For example, you should get a survival type if you have to move around your workspace to get access to different equipment.
If you have a small office, it is better that you opt for a chair that comes with a lower back. Lastly, you can go for a traditional or modern office chair based on your personal interest.

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5 Tips to Choose the Right Conference Table

According to statistics, managers spend a lot of their time in business meetings. If you have a properly designed conference room, you can come up with great ideas and have great meetings and discussions. Apart from this, conference rooms may help create a business environment. Since no conference meeting can be complete without a conference table, make sure you invest in a good table. In this article, we are going to talk about 5 things that will help you make the best choice.

1. Room size

First of all, you may want to consider your room size. There should be plenty of room around the table. The idea is to allow everyone to walk about the room. Besides, make sure that doors and windows are also easily accessible. Similarly, if you have an audio-visual station in your office, make sure the room has enough space for it.

2. Seating

Another thing to consider is the seating capacity of the room. After all, you don’t want to end up with a conference table that won’t leave any space for chairs you need in the office. There should be enough elbow room for all of your clients and employees during a conference.

3. Power outlets

In a conference room, some common items include projectors, laptops, and mobile phones. Therefore, make sure that the power outlets in the room are in the right places. After all, you don’t want to end up with a lot of entangled wires and cords during a conference.

4. Design Aesthetic

You may want to consider the design aesthetic of your conference room before buying a conference table. Don’t forget to consider your current furniture articles as well. You can choose from a variety of table shapes, such as racetrack, boat-shape, rectangle, and circle, just to name a few.

Besides, you can ask yourself if you prefer classic or modern furniture. Color choices also matter. Therefore, you should either go for dark or bright colors.

5. Budget

Last but not least, make sure you stick to your budget limit when it comes to buying a conference table. You can choose from a variety of options based on your price range. Based on the size, material, and design of the table, you should make the right choice. Another way to make a choice is to check out review websites. These sites will allow you to check out a huge collection of furniture articles.

Long story short, if you are going to make a great conference room, we suggest that you follow the 5 things given in this article. This will help you choose something that will serve your needs and look great. Hope this helps.

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