This Is The End
June 27, 2013
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This Is The End. If you’re an idiot you’ll love this movie. Like an idiot I saw this last night with my best friend…he’s an idiot too. That said, I admit I laughed out loud several times and (I can’t believe I’m admitting this) actually found this movie entertaining. I definitely saw it with the right person…if I had dragged my wife to this movie I would have been very lonely for a long time if you know what I mean. But would I recommend this movie to anyone? Hells no! Unless of course you’re a teenager or an habitual pot smoker. But unless one of these criteria applies to you this is a movie you should wait for on cable and watch it at 2a only because you can’t sleep.
My Market Watch: Bonds Up – Fixed Rates Much Better
Economic reports were untelling this morning, so why are rates much better than yesterday? Fed executives have been speaking out and the statements have essentially reaffirmed Quantitative Easing. If you recall I predicted Bernanke would make such a statement to ease the bond sell-off…but I was wrong…instead of Bernanke reaffirming QE he instead reaffirmed tapering QE. But other Fed speakers have done what Bernanke failed to do and as a result we have seen a nice jump in bond trading. Here’s a nice refresher on QE.
When traders buy bonds, like this morning, the bond price increases and this has a direct positive correlation to our rates/pricing. With bonds up +38bps on the day, and after a nice climb yesterday, pricing on fixed rate loans jumped significantly. Also, the bond is trading near a ceiling of resistance. If you think of the bond as a glass elevator, the elevator has been going up as bonds are being bought. As it approaches the ceiling (ceiling 2) traders pause…some traders will sell to take early profits while other wait to see if the bond will break through the ceiling. If it does, the next ceiling up (ceiling 3) would be a better place to sell…Trading-101 = buy low and sell high. So, let’s all give some positive energy to bond trading…BREAK THROUGH THAT CEILING! In the meantime don’t lock your loans…we might see better pricing, unless of course you see the bond start selling off….
My Schedule: I have a presentation this afternoon at 3p and will be difficult to reach late in the day.
|Lower Comp – Raise Volume?
The window to change Lender-Paid Comp Plans ends on Sunday 6/30. Third Quarter comp plans will be the same as they are now unless your Broker changes it. I have sent several messages to the Broker of record or Admin about this window and received many questions. The questions are:
- Should you reduce your commission as a strategy to increase volume? That is, if you reduce your lender-paid commission, will this make you more competitive and allow you to win against other LOs?
- Should you increase your commission as a strategy to increase revenue? That is, if volume is decreasing because of the market, should you make more on each transaction?
My opinion depends on your current marketing strategy. If you rely on consumer marketing then I advise you reduce your commission to strengthen your competitiveness. However, if you rely on solid long-lasting referral sources, then you might want to slightly increase your compensation to account for an expected drop in volume. I am happy to discuss…call or email anytime….
The window to change your comp plan is currently open…but it closes on Sunday 6/30. If you do nothing your comp plan will stay the same. If you change your comp plan it will be effective for submission packages uploaded on Monday 7/1 and for the remainder of the third quarter. Let me know if you require instructions on how to change your plan….
|Distinguish Yourself. In order to succeed in this business and in this market, you must find a way to distinguish yourself from other LOs. That is, if you are going to get more reliable referral sources, you must be able to clearly convey several compelling reasons why they should use you….My calendar is getting full – I am scheduling presentations to discuss (1) How to Be Successful In The Future Market, (2) Where to Look For Additional Referral Sources, and (3) How To Distinguish Yourself From Other LOs. Let me know if you’re interested in a presentation….