RateWatch - We Control the Market

Market: We got hammered today because...well, because. We're down 59bps at the moment, and you can thank us here at the Chris Jones Branch of City 1st that it isn't worse. It was worse, but we fixed it. I will tell you how below. This translates to a rise in rates of .25% over the past two days.

Analysis: Employment numbers came in right in line this morning, followed by home sales numbers that are so anemic they'd be confined to bed in any other market. The stock market euphorically rose to over 9000 on this news. Whatever. Who can analyze this stuff?

But I know how to control it. This has been tested so many times now that it's as good as proved. We know here at the office that when we lock a loan, we reverse the market (this only works when the market is tanking). In the last two weeks we've done it several times. The market starts to fall, so we call up one of our loans and lock it. The second we do, the rally begins. Happens 100% of the time.

Why didn't we do something about the terrible crash of Black Wednesday two months ago? Funny you should ask. We TRIED. Lenders stopped accepting locks, so we couldn't get one down. We sent in the request, and it was eventually honored - at the open of the market the next day, which sparked the largest up day for bonds in several years. I'm telling you, it's a curse having this much responsibility.

But I promise you I will use it with discretion and wisdom. I also promise that your personal loan will not be the one we sacrifice on the altar of the gods of mortgage rates. We'll get someone else.

Cj

P.S. Thought I'd again thank all of you for following me, and let you know that it matters a great deal to me. Today I picked up a gig writing for the Scotsman Guide, somewhat because of RateWatch. You are all very important to me, and you do get service that's not available to just anyone. Thank you again, and welcome to our new signups. Hope you like it here.

RateWatch - Drifting, but Which Way?

Markets: Yesterday was a good day up, and today is down only slightly, so it appears we might hold our gains. We gained 65 bps yesterday and have lost back 16 so far today, which on net is pretty good. For the uninitiated, there is a strong correlation between mortgage-backed securities (mbs) and mortgage interest rates. When mbs rise, rates fall, but the correlation is not 1-to-1. A 50bp move in mbs corresponds to at least a .25% improvement in rate price, which means about .125% better rate (see detailed explanation here). Usually. Not always. Not for every program. Not for every lender. Professional mortgage guys get paid for their services, and there's a good reason for that.

Analysis: Markets liked Ben Bernanke's testimony yesterday. He's forecasting more unemployment, and the conomy hitting abottom here and starting to climb late this year or early next. But he's also telling us that he sees a slow climb, with no huge bounce, especially in real estate. This is what is called an "L" recession, where things fall and then plateau at the new, lower level. I think that's a good analysis. I expect the same, for a good while, until US households shed more debt and build more cash. Right now it is the cash dearth that is starving the economy. That dearth has been created by huge appetites for debt. Eventually, all debt payments come a'cropper, and that's what is happening now. It will pass, if we're smart, and if the government doesn't insist on a recovery according to some electoral timetable.

Which is why I'd get my own house in order as fast as possible. We're not all that smart, and the government always acts according to electoral timetables. The basics still work, though, people. Save some, pay off your debt, find someone to help and help them. That's the way through.

Cj

Chris Jones

City 1st Mortgage Services

801-310-3407

Social Media and Real Estate, Vol. 1

I only address this topic because I can't find a lot of good commentary out there about this specific subject. I'm also no great expert; my experience with social media is pretty small compared to the Great Lords of Twitter and the Ancient Kings of Facebook. I confess this.

On the other hand, since according to Mortgage Strategy only 19% of the real-estate industry is even kind of using social media (this from a tweet this morning), and from experience I can testify that 90% of that 19% is using it badly and doing harm to itself, I thought I might at least give my opinions about how social media might be used well in a real-estate context. I am certainly using these tools better than most in my industry, and that has translated into gigs at Zillow and the Daily Herald Newspaper, so apparently my ideas do not entirely suck. Take them for what they are worth.

Here's how I got to writing this:

From Seth Jenson, a really good Realtor in Colorado: "Chris, what do you think about Twitter vs. Facebook? Do you think I need to be on both?"

Seth-

Whoo. What a question.

Facebook is a terrific way for people to connect. I'm no huge FB-er; I have about 400 friends, which is not a big number by any stretch of the imagination. I don't spend a lot of time trying to find friends on FB, or I likely could have a couple hundred more. And maybe I ought to do that. Probably I ought to do that. But it depends on what I'm using Facebook for.

If I'm using Facebook to keep tabs on people I know - my family, my close friends here in town, a few of the guys I went to HS with - then I'm doing it the right way. You can't possibly keep track of the doings of 1000 people every day. Impossible. However, if one of the reasons for you to be on Facebook is that you want people to remember YOU, well, then you might want a few more friends. You'd want to update your status at least once a day, and probably more than once. These wouldn't all be real-estate updates. In fact, most of them would be about anything except real estate, and would be only for the purpose of strengthening relationships. It is those relationships that bring the referrals that make you successful, and coincidentally, it is those relationships that make your life richer and more rewarding, so that's a happy thing. Facebook makes strengthening those relationships easier than ever, so I would definitely be on Facebook.

Twitter is very different. I love Twitter, myself. I like Twitter better than Facebook. Where I post or comment about 5x a day on Facebook, I do that twice as much - or more - on Twitter. Twitter is a research tool as much as it is a communications network. I get a lot of my news from Twitter, most of my reading material, and have most of my online conversations there, even more than email. Now, again, it depends on what you're using the tool for. Twitter can be a huge and pointless waste of your time. It can also do you harm, I think. But if you use it with respect, I think it has the potential to be incredibly valuable.

Here are some examples. I am not a big noise on Twitter. I have fewer than 200 followers. I'm following only about 100 people. I determined when I got involved that I wouldn't try to amass a gigantic following until I had some idea what I was doing it for. I didn't know enough about Twitter to know what I was doing, so I figured I'd start by following some people that DID know, namely, those that have good blogs about social media. So I followed Amber Naslund, Olivier Blanchard, Beth Harte, and some others, and learned about what Twitter could do, and more importantly, what I should NOT do on Twitter.

Then I started using the search functions of TweetDeck - TweetDeck is an indispensable tool for using Twitter - to follow mortgage news. There were some interesting conversations that came out of that, which resulted in my following Tyler Osby, Dan Green, and Agentopolis and a few others. They are doing most of the blogging and commenting about what's going on in the mortgage industry. There were two or three other topics that I thought would be good (hobbies, etc.) so I started running searches on those as well. I've acquired my 160 or so followers through conversations, not spam. In fact, most of those that are following me would unfollow if I used Twitter to promote myself ad-style. But because I blog, many of them are reading what I write, and following them allows me to read what they write, get smarter, and engage them in conversation. Again, for me it is about the relationships. It's made me better at mortgages, even though I haven't spent a great deal of time on Twitter talking about mortgages per se.

Bottom line? Yes, you should be on Facebook and on Twitter. Figure out what you want these tools to do for you, and design a strategy to get them to do that. Expect it to take time. If you do it right, it will take a lot of it, and a fair amount of work as well. Farming does.

Good luck. Follow me on Twitter @chrisjoneslehi, or find me on Facebook at www.facebook.com/chrisjoneslehi.