| If there has ever been a time when the | | | | |
| mortgage market needed heroes, it's now. | | | | The challenge for loan officers and mortgage |
| | | | brokers is to locate, contact, and close |
| At least six million adjustable rate | | | | these potential customers before anyone else |
| mortgages (ARMs) are scheduled for their | | | | does. It doesn't take x-ray vision or any |
| first reset between 2007 and 2011, according | | | | other super power to find them. Mortgage |
| to Dr. Christopher L. Cagan of First American | | | | brokers and loan officers now can buy |
| CoreLogic. Millions of consumers who have | | | | detailed ARM leads (also known as ARM |
| been able to afford ARMs with low | | | | refinance mortgage leads) for around $12.50 |
| introductory "teaser" rates will be hard | | | | per lead. These are not the typical public |
| pressed to make the new, higher payments they | | | | records. These new, bionic ARM leads are |
| will face. At least 1.1 million of these | | | | strengthened with detailed property and loan |
| loans will default over the next six years. | | | | information, such as initial reset date, |
| | | | current interest rate, maximum interest rate, |
| What, if anything, can save consumers from | | | | lender name, loan amount, property value, |
| these budget-crushing ARMs? Cue the music. | | | | available equity, year built, and number of |
| Enter the heroes: Loan Officer and Mortgage | | | | rooms-right down to number of bedrooms and |
| Broker. | | | | baths. Most importantly, some companies can |
| | | | guarantee that the leads they provide do not |
| The technical term for the solution to the | | | | appear on the national Do Not Call Registry. |
| ARM crisis is "market | | | | |
| remediation"-refinancing through private | | | | The new ARM leads do not permit time travel, |
| lenders. This is the only viable option for | | | | but they do allow mortgage brokers and loan |
| most ARM customers. "External remediation," | | | | officers to see as much as 120 days into the |
| e.g. governmental intervention, is a | | | | future, when the lead will reset. This allows |
| long-shot. The other main option, home sales, | | | | the lead buyer to conduct a mailing campaign |
| is not working well with the sluggish real | | | | in advance of the initial phone call. Some |
| estate market. | | | | companies even offer direct mail templates |
| | | | that can be populated with the lead data to |
| Market remediation is not driven by altruism, | | | | make personalized postcards and letters. |
| of course. There is a lot of money to be made | | | | |
| in home loan refinancing. The market is huge. | | | | Rising interest rates, stagnant home sales, |
| According to the Mortgage Bankers | | | | and fast-approaching ARM reset dates are |
| Association, $1.5 trillion in ARMs are | | | | threatening the financial well-being of |
| scheduled to reset in 2007 alone. This | | | | millions of Americans. Those who can guide |
| includes all resets, not just first-timers. | | | | them to safety are poised to make a lot of |
| Many of these consumers have been able to | | | | money. They also are likely to become heroes |
| handle the higher payments so far, but they | | | | in the eyes of the families whose homes they |
| are being stretched to the limit. | | | | save. |