It is apparent to me that there is a prevailing feeling in both the House and Senate, along with the Executive Branch, that our government should reduce its’ exposure in residential mortgage lending. Exposure is defined as its’ limited guarantees on FHA, VA, USDA, FNMAE and FHLMC loan programs. I kept hearing the supposition that private capital chould be encouraged to replace the current government participation that is so necessary to facilitate the securitization and capital acquisition. Government guarantees that keep mortgage interest rates low for the consumer.

I STRONGLY SUGGEST THAT NOW IS PRECISELY NOT THE TIME FOR OUR GOVERNMENT TO “REDUCE IT’S EXPOSURE IN THE RESIDENTIAL MORTGAGE INDUSTRY

1) History shows that FHA was begun in 1933 in the depths of the Great Depression. FDR realized that what stimulated the economy was jobs. The Government began the WPA program of building roads, bridges, dams, federal courthouses, post offices and other building projects to create jobs and leave capital improvements for future generations. FDR also realized that it was the housing industry that would have the greatest positive ripple effect on local and regional economies, which together would stimulate a national recovery. At the time one needed to make a 25, 50, or even 75% down payment in order to finance a home. The FHA program of 3% down was revolutionary. This program, along with the VA program of 100% financing, have, over the history of their existence, enjoyed exceptional financial success and have contributed greatly to the economy for over 70 years.
Today, we are nowhere near the point of economic crises that we were in 1933. If our leaders were courageous enough to begin these revolutionary and historic mortgage programs then, now is certainly not the time to curtail them.

I SHUDDER TO CONSIDER A RE-INJECTION OF SIGNIFICANT/REPLACEMENT PRIVATE CAPITAL BACK INTO OUR INDUSTRY. A RETURN TO “FAST & EASY” LENDING.

2) It was the private, Wall Street acquired, capital infusion that got the mortgage industry into this mess. Wall Street developed and securitized mortgage instruments with appealing, exotic and historically toxic terms that were primarily designed to create Wall Street investor profits that significantly exceeded those attainable via the industry standard mortgage products listed above. Acquiring these newly designed hybrid loan programs was Fast & Easy for the consumer, and seemingly very profitable for Wall Street investors. However, their design paid little or no regard for the potential economic hardship to the consumer, should property values stabilize to the point that refinancing was no longer an option to forestall adjusting the payment to what were draconian “fully indexed accrual rates”. Payment adjustments that could raise the consumers’ monthly payment 50% or more.
I am a 40+ year veteran of mortgage lending and have lived through the corrupting of an outstanding industry because, in great degree, the profiteering by the boys who raise the Private Capital that D.C. insiders are suggesting is a plausible replacement for government involvement. I shudder to ponder a return to that destructive time.

WHAT ACTIVITY OF A GOVERNMENT COULD BE MORE IMPORTANT THAN FACILITATING THE HOUSING OF IT’S CITIZENS?
Almost every American is now living in a home or apartment that was directly or indirectly facilitated by one or more of the existing government sponsored residential mortgage lending initiatives.

If there is a more relevant use of a governments authority, than contributing to sheltering it’s citizens, please point it out to me.

He has mastered how to achieve multimillion dollar per month personal production year after year throughout his career.

He knows how to do it.  He revels in every opportunity he has to share how it is done.

Greg just returned from New Zealand where he shared his strategies with hundreds of Kiwi Loan Advisors at the NZMBA annual convention to rave reviews.

Consider inviting Greg to teach your team.  You’ll be glad you did.

Darren Pratley, President of the New Zealand trade association reports that registrations for the August 4 conference are already the largest ever.  “We made a decision to hire mortgage industry icon, Greg Frost, to come all the way from the U.S., to share his proven production strategies with us. This has stimulated tremendous interest in the meeting and is proving to be a very good investment.”

 “We are seeing a steady migration of quality Brokers to the Mortgage Banker space,” says Greg Frost, President of Frost Mortgage Banking Group, a Division of PRMI.  “We licensed 4 new offices in April/May and have 9 more in various stages of evaluation, migration and licensing.  Our business model speaks to the entrepreneurial spirit of the Broker while providing increased product access, as well as financial stability.  Brokers seem to agree that the Mortgage Banker correspondent platform is preferable to going to work for one of the large commercial banks.”

Let me say that I don’t agree with Jason at all.  I am confident that the Mortgage Banking industry, is so vital to the ethical distribution of mortgage credit to the American public, that no set of industry circumstances, natural or legislated, will depose it from its position as the nations #1 mortgage resource.  We Mortgage Bankers are the entrepreneurs of the Mortgage industry.  We are licensed by our states and by the National Mortgage Licensing Agency. We take mandated continuing education, which by the way, the exemption of which, Jason’s bank lobbied congress to gain.  As a result our Loan Originators are eminently more educated and regulated than those working for the banks.   Every day, we put our cash, credit, and net worth where our mouths are, as we fund billions of dollars of loans and then sell them to bank investors, many to the Bank of America.

It’s funny to hear Jason’s perspective, because his opinions are not shared by the officers of his own bank.  Certainly not by the Bank of America officers who manage that banks correspondent lending division.  The Bank of America is either the largest or second largest purchasers of Mortgage Banker originated mortgages every year. These bank officers have told me, over and over again, that the bank relies on the production capacity of the Mortgage Banking industry to help the bank replace its mortgage pay downs every month.

These Bank of America officers have repeatedly told me, at various meetings throughout the US, that we Mortgage Bankers play an integral and important role in their banks budgeted growth. A point of view that is in total contrast with Jason’s claims.

I was called by another friend and fellow mortgage banking entrepreneur today, as some of his people were being recruited by Jason.  He was concerned that Jason had shared his….”you’re all going to be toast after April, 2011” perspective with his employees and successfully hired one of his team.  I shared with him what I now share with you……”Capitalism and the entrepreneurial spirit that made this country great will not be stifled by a few banks, who themselves needed a government bail out, an infusion of your tax dollars, in order to survive.  I think that we should just “consider the source” and focus on continuing to provide our fellow Americans with the best choices in mortgage credit, at the fairest prices, that are available in the marketplace today.”

Thank you and have a great day!

Mortgage legend Greg Frost Sr. is taking part in the NAMB conference in Las Vegas in December.

Industry legend Greg Frost Sr., President of Frost Mortgage, will be taking part in the NAMB/WEST Conference from December 4-6 at the MGM Grand Las Vegas with a special luncheon presentation.

This is an incredible opportunity to see one of the most dynamic speakers anywhere share valuable insights for top originators, producers, branch managers, loan officers and anyone else with an interest in selling. Click above for a link to the conference site, or connect via the NAMB Facebook page.

We hope to see you there!

At 61, Frost has been among the nation’s most successful mortgage loan originators for three decades. It has led him to become a national motivational speaker. He has averaged 40 speeches annually for two decades.

He has leveraged those national contacts to expand Frost Mortgage in the past three years. In September, he financed $30 million worth of loans across nine states.

Read the whole story at Hard knocks prepared Greg Frost for business bumps | New Mexico Business Weekly.

If you’d like to learn more about Greg’s dynamic and proven motivational speaking, please visit GregFrost.com.

“Fannie and Freddie’s loan portfolio performance will dramatically improve as loans originated since January of 2009 add to the portfolio,” Greg Frost Sr. of Frost Mortgage Banking Group in Albuquerque said.

Read the whole story at Fannie, Freddie bailout may cost $363B | New Mexico Business Weekly.

Military families struggling with a mortgage payment because of the death or injury of a service member on active duty will get some assistance, under a new program backed by Fannie Mae.

It includes a mortgage payment forbearance of up to six months in such cases.

“No family impacted by the death or injury in the line of duty should have to face the additional burden of foreclosure as the result of the hardship,” said Jeff Hayward, senior vice president of Fannie Mae’s National Servicing Organization.

Under the program, lenders may suspend or reduce a borrower’s monthly payments for up to six months under Fannie Mae’s “Unique Hardships” guidelines. Credit bureau reporting will also be suspended during the forbearance, meaning qualified families participating in the program will not see their credit scores negatively affected.

“This program, though well intended and long overdue, will require a great deal of understanding, trust and coordination between Fannie Mae and their seller-servicers,” said Greg Frost Sr. of Frost Mortgage Lending Group in Albuquerque.

“It remains to be seen how quickly and with what required verification the two entities will be able to respond to a request for this payment abeyance.”

Fannie Mae (OTC BB: FNMA)has established a hotline to provide more information on the military program at (877) MIL-4566

Jeff Clabaugh of the Washington Business Journal, an affiliated publication, compiled this report.

Read more: Fannie Mae offers military hardship break – New Mexico Business Weekly