1. Remember These Statements Most highly successful RMLOs are not naturally talented, but they are well-trained. The information presented here really isn’t difficult to understand; its just new.

2. Mortgage Industry Split in Two Fixed and Adjustable/Hybrid Refi and Purchase Prequal vs. (Pre)Approval A (agency) vs. BCD/Nonprime Conventional vs. “Govies” Equity lenders vs. Agency lenders Transaction vs. Relationship

3. Mortgage Industry Split in Two Non-conforming and conforming Buyer and seller Buyer’s agent and seller’s agent PMI and No PMI Broker and Banker Originator and processor Understaffed or overstaffed

4. Mortgage Industry Split in Two Ethical vs. Unethical Liars vs. Truth-tellers Trained vs. Untrained/Incompetents Order-taker vs. Planner Local vs. National Fully-documented vs. No-doc Phone vs. Face-to-Face

5. Recommended… J. Guttentag’s Mortgage Encyclopedia www.MtgProfessor.com “Mortgages 101” e-book www.Mortgages101.com Cruise Websites list Cruise Amazon lists

6. Recommended… www.BankRate.com: Free online mortgage basics class www.BankRate.com www.homeloanlearningcenter.com Free online homebuyer education class www.homeloanlearningcenter.com www.radian.biz Free homebuying manuals

7. Recommended… www.owningyourfuture.gov/oyf/buyi ngahome.cfm - “Owning your future” homebuying website from the US Department of Housing and Urban Development. (The information on this website is in the public domain.) www.owningyourfuture.gov/oyf/buyi ngahome.cfm http://freddiemac.com/corporate/buyo wn/english/preparing/right_for_you/ http://freddiemac.com/corporate/buyo wn/english/preparing/right_for_you/

8. Why We Do What We Do Why We Do What We Do Because of home equity, the average American homeowner aged 35-64 has ___ times the average net worth of a renter in the same age category. Because of home equity, the average American homeowner aged 35-64 has ___ times the average net worth of a renter in the same age category. 05 05 10 10 25 25 30 30 40 40 50 50 60 60

9. ICED and RAW ICED: ICED: Income Income Credit Credit Equity/DP Equity/DP (2 of 3) (2 of 3) RAW: RAW: Ready Ready Able Able Willing Willing (3 of 3) (3 of 3)

10. What Mortgage Loan To Get? 30-year fixed-rate loan: Payments are locked for the life of loan, but borrowers pay for this predictability in the form of a higher rate. Payments are locked for the life of loan, but borrowers pay for this predictability in the form of a higher rate. These loans are good for buyers who are going to keep their loan for 7 years or more. These loans are good for buyers who are going to keep their loan for 7 years or more.

11. What Mortgage Loan To Get? 30-year fixed-rate loan: Almost always the wrong choice, but chosen by many homebuyers anyway, probably out of tradition, or pressure from their elders. Almost always the wrong choice, but chosen by many homebuyers anyway, probably out of tradition, or pressure from their elders.

12. What Mortgage Loan To Get? Adjustable (ARM): Interest rate fixed for a set period, then fluctuates every month, six months, or year according to schedule. Interest rate fixed for a set period, then fluctuates every month, six months, or year according to schedule. The borrower accepts a shared interest rate risk in exchange for a lower initial rate and lower monthly payments. The borrower accepts a shared interest rate risk in exchange for a lower initial rate and lower monthly payments.

13. What Mortgage Loan To Get? Adjustable (ARM): The shorter the ARM term, the lower the rate. The shorter the ARM term, the lower the rate. Good for buyers who will move or refi in a few years. Good for buyers who will move or refi in a few years. Hybrids are popular, too. Hybrids are popular, too.

14. What Mortgage Loan To Get? Interest-only: Borrower makes interest-only payments for a set period, then may have to make principal payments. Borrower makes interest-only payments for a set period, then may have to make principal payments. Payments are lower, and no scheduled amortization occurs. Payments are lower, and no scheduled amortization occurs.

15. What Mortgage Loan To Get? Interest-only: Payments can be around 20% lower than fully-amortizing loans. Payments can be around 20% lower than fully-amortizing loans. Good for buyers who think their income will rise in the future, and for buyers who think the home will increase in value. Good for buyers who think their income will rise in the future, and for buyers who think the home will increase in value.

16. What Mortgage Loan To Get? Piggybacks/Combos: Two loans Two loans Allows buyers to avoid paying PMI or avoid paying “jumbo” rates. Allows buyers to avoid paying PMI or avoid paying “jumbo” rates.

17. What Mortgage Loan To Get? Piggybacks/Combos: Good for buyers whose PMI would cost more than the interest on the 2d. Good for buyers whose PMI would cost more than the interest on the 2d. Plus, that interest is, unlike PMI, tax-deductible. Plus, that interest is, unlike PMI, tax-deductible.

18. About Giving Advice Don’t give tax advice. You likely aren’t qualified to do so, and it is not your role in the mortgage transaction to do so anyway. Don’t give tax advice. You likely aren’t qualified to do so, and it is not your role in the mortgage transaction to do so anyway. Send borrowers to: Send borrowers to: www.irs.gov www.irs.gov

19. About Giving Advice Don’t give an opinion on the direction of interest rates. Don’t confuse knowledge for wisdom. Send borrowers to www.bankrate.com Don’t give an opinion on the direction of interest rates. Don’t confuse knowledge for wisdom. Send borrowers to www.bankrate.com www.bankrate.com Never give legal advice!!! (UPL) Never give legal advice!!! (UPL)

20. Mandatory Reading Three booklets: HUD Settlement booklet HUD Settlement booklet CHARM booklet CHARM booklet When Your Home Is On The Line (HELOC booklet) When Your Home Is On The Line (HELOC booklet)

21. Mandatory Reading Other: www.HUD.gov www.HUD.gov www.HUD.gov www.FTC.gov www.FTC.gov www.FTC.gov www.MyFico.com booklet www.MyFico.com booklet www.MyFico.com

22. What is the Most Important Question to Answer When Deciding Which Mortgage Loan to Select? How long… How long…

23. What is the Most Important Question to Answer When Deciding Which Mortgage Loan to Select? will the borrower keep the mortgage? (Not how long will the borrower stay in the home.) will the borrower keep the mortgage? (Not how long will the borrower stay in the home.)

24. Borrowers Need You More than half (52%) of all US homeowners in a recent survey said they were not at all or only somewhat knowledgeable about their mortgage options when they bought their home. More than half (52%) of all US homeowners in a recent survey said they were not at all or only somewhat knowledgeable about their mortgage options when they bought their home.

25. Borrowers Need You Of the 48% who said they were knowledgeable about mortgage loan options, 55% were homeowners over the age of 55, 54% were divorced, widowed, or separated, and 51% had at least a college education. Of the 48% who said they were knowledgeable about mortgage loan options, 55% were homeowners over the age of 55, 54% were divorced, widowed, or separated, and 51% had at least a college education.

26. Borrowers Need You Homeowners said prospective homebuyers should understand how much of a home they can afford to buy (55% mentioned this as their first or second piece of advice), should research the best mortgage loan options for their needs (45%), and should get pre-approved for a mortgage loan before searching for a home (36%). Homeowners said prospective homebuyers should understand how much of a home they can afford to buy (55% mentioned this as their first or second piece of advice), should research the best mortgage loan options for their needs (45%), and should get pre-approved for a mortgage loan before searching for a home (36%).