Phil Grossfield's Blog

LAST CHANCE!   The window to change Lender-Paid Comp Plans ends this Sunday.  Third Quarter comp plans will be the same as they are now unless you change it. This is your last chance!

Lower Comp or Raise Comp?
Third Quarter comp plans will be the same as they are now unless you change it by Sunday. I have sent several messages to the Broker of record or Admin about this window. Here is the question you must answer:

1. Should you reduce your commission as a strategy to increase volume/revenue? That is, if you reduce your lender-paid commission, will this make you more competitive and allow you to win against other LOs?
2. Should you increase your commission as a strategy to increase per loan 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 this 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….

My Market Watch:  Bonds Were Up But Now Down -19bps — Fixed Rates Slightly Worse So Far…

Bonds are down -20bps on the day. Pricing was the same at some coupons and worse at others, namely the higher rates. Overall, this has been the first positive week since last April…we’ll take it!

Of concern this morning is the latest move by traders to sell off bonds. With bonds being sold by traders to take profits from this weeks upward move, the bond is now selling near a floor. It looks like it’s going to hold, but if it should slip down below this floor, then we could see a bigger sell off and a reprice for the worse. This is somewhat alarming and I advise you to lock if necessary if your borrower is happy with the current rate and price. Remember, Interbank’s online locking system is open until 9:30p Sunday night.

Traders are selling and the bond is getting close to a floor (Floor 1). When traders sell bonds, like now, pricing typically worsens. With bonds down -20bps on the day, and because they are trading so close to the floor, it’s a good time to lock in. If the bond falls through Floor 1 then next floor down is the Lobby.  Let me know if you have questions….

My Schedule:  I have a presentation at noon.

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….