Lunch and Dinner meetings have run their course and real relationships are now built on shared experience and fun. Aspire to friendships and not acquaintances…. Try a new path.
Banks continue to struggle in the Retail Mortgage Business. Profitability and Capital requirements are making Banks rethink the size of their mortgage operations. Smaller complimentary operations are probably the future banking norm. When banks see the retail mortgage business as a declining sector, new graduates, growing population, and a strong economy would suggest the opposite. IMO, Home Ownership is the American Dream and the cornerstone to America! I say it’s a surging industry and our sales would support my belief. GO America!!!! Read More Here.
Vernon Chandler posted this image this morning. It reinforces an important belief that I live by. Vernon, Brandi, Jenna, Corey, Jeffrey and a few others had the opportunity to visit Cuba with a Partner of ours recently. Many would say they are too busy or my favorite TV show comes on tonight, SEM people embrace adventure and experiences. Complacency leaves the “Whatif” unanswered. Because we embrace new experiences and do not make excuses, we try new things. They now have some cool travel street credit. Americans who have visited Cuba and can speak first hand on a unique culture. The US has now closed that door. In life, some doors are only open for a finite time due to timing and opportunity aligning. Always explore, be bold, never regret.
Dig deeper or Dig through the noise. Be Bold, Dig for the best You and the best Family You!
Talking about Mortgage Rates is just part of the equation. To fully communicate client benefit you have to discuss mortgage rates in terms of effective rate if they itemize their tax returns.
Currently the tax code provides for mortgage interest deductibility. Contact your CPA if you are unsure if you can itemize with IRS Form Schedule A.
Consumers that itemize and deduct qualified mortgage interest should focus on their effective mortgage rate rather than note rate. The higher your tax bracket the greater the benefit and lower the effective cost of financing a home.
Effective Rate = (1-tax bracket) * Note Rate
A 5% note rate would have the following effective rate for the following:
22% Tax Bracket = 3.9% Tax Effect Rate (1.1% lower than 5% note rate)
37% Tax Bracket = 3.15% Tax Effect Rate (1.85% lower than 5% note rate)
Although mortgage lenders try to make you believe lenders have some special access to lower mortgage rates, the truth is we all get mortgage products from the same sources. What varies in the note rate stated by a lender’s sales person is the assumptions in pricing and yields that have not and may not be realized in servicing. The later has cost many mortgage lenders their bank and company when pricing too optimistically.
Instead of worrying about note rates which is set by the market, focus on the real savings provided by the IRS tax code. If you are buying a house, you will want to evolve from the 1040ez to 1040 and schedule A. Another great reason to buy a home!
Asking your loan Originator if they are Licensed will also ensure you get a Licensed Mortgage Originator. Bank Mortgage Originators do not take or pass the national and state competency test to originate. Consult your tax advisor if you have questions about tax deductibility.
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I am not a big fan of canned quotes; however, this popped up and it resonated with me. It conveys a belief of mine and was the focal point of several conversations I had last week. I believe people should have the opportunity to grow their career and earnings each day they work rather than remaining status quo for years and decades due to complacency. “Without better soil, you will become pot bound and never growth no matter what you may be told. Great Talent Deserves Great Media to Grow.” Cal Haupt
Everyone talks about top Producers? Focusing on Top Earners would be a better ranking criteria for Mortgage Professionals.
People always ask me what SEM’s production is and I proudly tell them our Shareholders own the best margined business in the industry. Frankly, production does not pay the bills.
A Company’s ability to convert production to Revenue to Net Income is sustainability. No Debt and Vertical integration of services and functionality creates incredible efficiency so you can pay your team well and still post impressive earnings. Many Mortgage companies use bolt on services and non-direct secondary access which is expensive and wastes revenue.
If your margins are too tight and you fail to balance revenue to expense, your company will have to sell or close their doors as we continue to see. The key and art is to price at market and competitively adjust to earn your Partner’s business.
Over my 26 years, I have heard “my pay will blow your socks off”, “I make a lot”, etc. If you only play pick up basketball in your neighborhood and there was no TV or Internet, you would not realize there is an NBA.
Focus on what pays your bills. Trophies and Trips will not pay your bills. Earn and grow your business. Buy your own better travel experiences with better production to pay conversion. I know from personal experience none of the Bank Trips I won were half as cool as the travel I enjoy today.
Mortgage Originator’s are realizing they have to make changes with respect to what is the most beneficial goal for them. As our Originator population ages, preparing for a secure retirement has become a call to action.
Cal Haupt, Chairman and Chief Executive Officer, Southeast Mortgage of Georgia, Inc.
Volume – Pay Shift
Have you ever heard the phrase, “change your zip code”? This means if your current actions create the same outcome time and time again, you have to change your zip code to get a different outcome.
I learned many lessons from my mentors during my Banking Career. One of the most valuable lessons was the Bank always does what is in the best interest of its Shareholders. It is the fundamental responsibility of a Corporation. Early in my Bank career my mentor granted me stock based on performance and I quickly understood the generous recognition to be a Shareholder. The wealth created by the sale of that stock was life changing and an experience and dynamic I wanted at the core of Southeast Mortgage of Georgia, Inc.
One person cannot build a company, it takes a Village. The Village should benefit. This belief is part of your culture or not. If it’s not, what is your longer term outcome?
Banks can sell many products if mortgage origination is determined not to be in the Shareholders best interest. Read the News, it’s the trend. Southeast Mortgage sells one product and evolves with media and technology. We originate mortgages only and are all in and have been for 25 years. Your career deserves a company that is all in on what your income is dependent on.Over the past 25 years, I have seen a lot of Mortgage Operations go out of business and a few sell. Poor judgment, poorly conceived plans, and unsustainable strategies were the cause and cost good employees their jobs and the valuable time they spent away from their family growing the company. When it comes to taking care of your family or planning for retirement, you need proven leadership that can help you accomplish your goals long term and provide equality. Change your zip code for a path to retirement.
When your Bank or Non-Bank sells and asks you to stay with the company they sold, who’s best interest is it? Yours or the New Shareholders? You basically accept a new job (sometimes with pay cuts) without an interview and without comparing other opportunities. The company being bought and the reasons you worked there ended with the purchase. The new Bank or Non-Bank will do what is in their Shareholder’s best interest in the manner they believe maximizes their Shareholder’s value. Its important to understand your new leadership works for their Shareholders not as your fiduciary. Change your zip code and take a chance on a path to be a Shareholder.
When a Bank or Non-Bank sells you only hear about a few people that got a big check. Search Google, Search Google2, Search Google3, SEC filings are public knowledge and show how many shares and how much each made on the sale and where the expense cuts come from to create efficiencies. Mergers rely on expense cuts to leverage combined revenue into a higher net income for Shareholders. IMO the Hundreds of Millions of Dollars from the sale should also benefit the employees that created the value. The reality? The employees who created the Hundreds of Millions of Dollars in value do not share equitably in the sale. After the close of the sale, employees at the company being bought have to find a new job or hope the new company they were sold to continues in a manner that allows them to make the same income. No Bank operates the same nor has the same strategy. There is a reason one Bank buys another and it is usually about Deposits and cutting non-interest expense to create a higher net income. Expense is always cut from the company being bought. Bank sales are SEC regulated and public knowledge. Read the agreement.
Loyalty is a two-way street. If you are loyal, you should be rewarded when good things happen. If your leader just moves you from company to company 2 – 3 times with the same outcome, turn the page (Change your zip code) and try a better path. You only have a few opportunities in life to make a better path. Change your zip code to a path that makes you the owner.
What do your Shareholder’s look like? Do they represent you? Do you have a path to become an owner? Have you ever met your Shareholders or Board Members?
We work side by side daily. At Southeast Mortgage of Georgia, Inc., our shareholders are our Processors, Underwriters, Closers, Originators, and Administration. Four of our Shareholders have retired comfortably.
This is what our SEM shareholders looks like. Every year we add those that help us grow. From 2 shareholders to 41 is equitable distribution of our success.
They all changed their zip code at some point in their career to make a better path for themselves and their family.
With change comes an opportunity for a better outcome.
Our last EVP is now our COO. Since inception in 1993, SEM has had 6 Executives in this group with two retired. Shaun joined SEM on 10/10/2005. After a football career and graduating from the University of South Carolina, Shaun entered the Mortgage Industry as a Loan Officer in our call center and eventually worked his way through the ranks to Office Manager and then Senior Vice President. With a fundamental understanding of our business and the respect from those around him, he took on our newest strategies with passion and commitment. Shaun now works directly with Cal Haupt, Chairman and CEO on SEM’s Social and Media Strategies including various projects with future innovation implications for our industry.
“Shaun is a testament to passion, smart work, and commitment to a common belief. With SEM, Shaun has accomplished more than most in a 30-year career. Instead of moving around like many in our industry, Shaun focused on learning and his skill set. As a result, he made himself invaluable and a trustworthy teammate / large shareholder. I look forward to sharing what I know so he can successfully take on more responsibility in the future. Shaun is not just a smart charismatic guy, he is a good friend and a role model of how to evolve a fantastic career.” Cal Haupt, Chairman and CEO, Southeast Mortgage of Georgia, Inc.
The equivalent of $1 in 1963 is $7.79 in 2018. If you saved your $100 in cash under your mattress in 1963, you would $12.84 of relative cash left.
If you invested $1 a day every day since 1963, you would have $842,416.
Owning a home is an inflation friendly activity. Unlike cash that deteriorates due to inflation, home values rise. With QE1, QE2, QE3 monetary policy since the last financial crisis, inflation should be in the forefront of your personal financial plan.
In today’s economic environment, holding cash is no longer king. A large cushion for the unexpected is always prudent; however, the QE waves heading our way has created an interesting portfolio consideration.