Phil Grossfield's Blog


Sometimes I Hate Human Beings…

smileSometimes I absolutely hate human beings…and sometimes I absolutely love them.   I challenge you not to smile…click the picture below:

My Market Update 10/05/2015

The Fannie Mae 30-year bond is -6bps since Friday’s close.  Generally a lender’s rates/pricing worsens when the bond is being sold-off.
It’s a relatively quiet week with respect to economic reports so traders will be looking at technical signals to decide whether to buy or sell.  When I say technical signals, I mean past trends in the buying and selling of the 30-year Fannie Mae bond by traders.  These past trends are referred to as Moving Averages.  In a nutshell, traders look at these moving averages to see if a pattern exists that might give them the upper hand in guessing when the bond might go up or down.  If a trader has a good guess as to which the bond will trade, then they can proactively buy or sell strategically.  For more details on this tactic by traders, refer to My Great Bond Elevator Analogy.
Why should a Mortgage Broker be knowledgeable about traders’ behavior…how does that relate to your business?  Well, let me start by answering that question with some questions.
Have you ever had a borrower that wasn’t interested in rate?
How often does your borrower say, “I don’t care about my rate”?
How often does your borrower ask, “so, what do you think rates are going to do?”
How about this one, “should I lock or wait?”
confusedSo what do you say?  Uh, I don’t know?  Uh, I can’t predict rates so it’s a crap-shoot?  Uh, me don’t know what going to happen to rate?  Simply put, the more information you can give your borrower, and the more knowledgeable your borrower perceives you to be about the market, the more trust you will instill.  And borrowers that trust their mortgage professionals will not only continue to do business with you, but they will tell the entire world how great you are.  Now, I’m not suggesting you need to be an expert on market transactions and get an economics degree like me (I also have a law degree and practiced law for many years but this isn’t about me so I’ll shut-up about me now since you already know I’m awesome).  But I am saying that having a basic understanding of how the market works and how world economies, news, and politics affect trading will give you excellent talking points with your borrowers.  Many of you call me and ask me what I think is going to happen in the marketplace…I always answer…I’m not always right…but I always have an idea of what’s going on and how I might advise you.  My clients find that valuable…do your borrower’s find you valuable?  If you want to learn more, let’s get together…I have a lot to share…

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