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With Memorial Day coming up on Monday, we wanted to take time to recognize some of the mortgage professionals at Guardian Mortgage that have served our nation. What you may not realize is that the values instilled by military service translate easily to mortgage lending. Integrity, service, and respect are characteristics instilled in all branches of our nation’s armed forces, and you can find them in the staff at Guardian Direct as well.

So thank you, Guardian Direct, for giving us a chance to shine a light on the former servicemembers on your staff. To find out more about these amazing men and women that make up this month’s Guardian Angels, read on for our Q&A with Jeff Guthrie, Vice President of Sales at Guardian Direct.

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Guardian Angel: SMU Alum Wade Betz is a Man With a Plan

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Sure, he’s from New Orleans, but as most Dallas transplants, Wade Betz got to North Texas as soon as he could, which was to attend SMU. And sure, there’s some tension between his LSU-loving family and his SMU ties, but we’ll forgive him! There’s so much more to Betz, though, a loan officer at Guardian Mortgage and this month’s Guardian Angel.

As Betz sees great things ahead for Dallas, we see great things ahead for him, especially because Betz takes great care of his relationships with this friends, family, and his customers and enjoys an extremely high referral rate compared to his peers. Find out what makes Betz an exceptional mortgage professional after the jump!

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Guardian Angels: Whether Cycling or Caring For Clients, Mark Watson Steps Up

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It’s true: Some of the most amazing, dedicated people in the mortgage industry work for our hometown lender, Guardian Mortgage. These are the same folks who answer phone calls after hours, always greet you with a smile in the checkout line, and volunteer to make our communities better. In short, these people step up.

That’s what Mark Watson does. Watson, who is this month’s Guardian Angel from Guardian Mortgage, takes the time to make sure his client has an excellent experience no matter the size of the loan, ensuring that they become the industry’s most sought-after client: A happy referral generator.

We were absolutely thrilled to chat up Watson, who is an avid cyclist. Besides being an all-around great guy, he knows the mortgage business backwards and forwards, and has the kind of experience that clients seek. Find out more about Watson after the jump!

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Guardian Angel: Jeannie Smith Knows That the Key to Success is Never Giving Up

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Jeannie Smith with “The Wee Ones”: two of her pack of miniature dachshunds.

We love Jeannie Smith and her “can-do” attitude. She’s the kind of woman that can inspire confidence after just a moment with her, and she is a dog lover, to boot!

It’s no wonder that Jeannie, a mortgage professional that looks after her clients like family, is this week’s Guardian Angel. She takes time with every client to make sure that their needs are met, if not exceeded, which is a valuable asset in this quick-changing mortgage environment.

“I care about each loan and customer I work with — whether it’s a$ 50K loan or a $5M loan — and I love providing the white glove treatment,” Jeannie says. “I approach each loan and customer with a wide open mind so that I can learn about them, their financial goals, expectations, and what keeps them up at night when they think about the loan process.”

That’s the kind of personal service that is all too rare these days, but it’s exactly what you can expect at Guardian Mortgage. Find out more about Jeannie and how, through her tenacity, she’s made a wonderful career in the mortgage business.

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QM And QRM Dodd Frank

The real estate landscape is constantly changing, thanks to a regulatory environment that is learning from its past. After the housing bubble burst, fueled by the sub-prime lending market crash, lawmakers were in a frenzy to control the damage. The question is, though, with regulatory belt-tightening, will there be unintended consequences? How can this actually prevent homeowners from going underwater?

That’s where staying up-to-date comes into play, and there are few experts better versed in the new mortgage alphabet soup than the folks at Guardian Mortgage. If you haven’t the faintest clue as to what QM, QRM, and Dodd-Frank are, then perhaps you should read this fantastic article from Guardian themselves:

The Dodd-Frank Consumer Protection Act, which was signedinto law in July 2010, was designed to restore consumer confidence in the housing industry. The law establishes requirements, referred to as Qualifed Mortgage (QM) and Qualifed Residential Mortgages (QRM) that must be met before a mortgage, new or refinanced, can be created.

Need to bone up? Read the whole article from Guardian Mortgage.

Red Cross Moore OK

Thank goodness there are great companies that are focused on helping others. Take Guardian Mortgage for example. This incredible company is raising money to help with tornado recovery in Oklahoma.

Moore, Okla., has been absolutely devastated by the F-5 tornado that ripped through the town on May 19. The Oklahoma City suburb is mourning the lives lost and trying to pick up the pieces. To help them find a way to put their lives back together, Guardian Mortgage employees are reaching out to customers, mortgage associations, and lending partners to raise funds to aid in recovery.

“During an internal effort held on Friday, May 24, Guardian and its employees, through employee donations and a company matching program, raised over $1,500 during a 20-minute drive period to support the cause,” a press release stated. “To further help those in need, Guardian Mortgage invites its customers and lending partners to participate in this effort by texting the phrase REDCROSS to 90999. Each text will send a $10 donation to the Red Cross in an effort to better support those hit by this tragic event.”

Amazing.

Mirror Mirror on the Wall: How To Snag the Very Best Mortgage Rate of Them All

Sponsored guest post by Jeanne Smith, Guardian Mortgage Company

We all know interest rates are at record lows, we are beaten with this news every time we turn on the news. I mean, great rates are just a click away, right? Wrong! If you are basing your idea of the “best” mortgage rate on the rates you are quoted by lenders or ads on the internet, you may not be getting the best rate.

Sounds crazy, right? The web rules!

What most people don’t realize is that the rate quoted by a lender consists of four main parts: the mortgage-backed security pricing (MBS), the guarantee fee (G-Fee), delivery fees and profit margin. Don’t freak, we’ll clarify below.

We will examine conventional rates, which are applicable to mortgages of less than $417,000, and which conform to the underwriting guidelines of Freddie Mac or Fannie Mae, that other company you hear a lot about in the news.

Are you sitting down? Of the four rate parts, the MBS price and delivery fees are the only constant between all lenders. All mortgage lenders get the same MBS pricing and all mortgage lenders are using the same delivery fee rules, so the only difference in rates should be based on the lender’s performance – right? It should be, but it doesn’t work that way in reality, which can lead to unhappy borrowers at closing. Mortgage companies, shocker, actually get slapped by the Feds occasionally for delinquencies and defaults, especially companies that deal in high volume or riskier loans.

We behave. Guardian Mortgage has the very highest and best rating for historical delinquencies and defaults with Freddie Mac and Fannie Mae, which translates into the lowest G-Fee for all lenders our size. This means our rates begin at the lowest point (the MBS price + the G-Fee) and allows us to be as competitive as possible with those rates. In addition, we service our own loans after closing, so our profit margin on rates is the priority for our company income. The servicing income earned allows us to be profitable at the lowest margin in the industry. And it also means you have a human being who may know a thing or two about your loan to talk to should the need arise.

As a result, when we hear from a prospective customer, “This other lender offered me less than your rate,” we know that the probability of the borrower being closed at the rate that was just “quoted” to them is very low. We know what the very lowest rates are that day.

So how are these other lenders offering lower rates?

Most likely, they quoted the rate without understanding the customer’s situation – and thus have not calculated the correct delivery fee – or they plan to switch the rate at the last minute, which happens more than I wish we knew. The truth is they can’t deliver a rate below ours without taking a loss on that loan.

The delivery fee is complex and if your lender isn’t asking questions about your situation, they are likely to make a mistake – one that you pay for later.

What influences the delivery fee and how can you make sure it is accurate?

The delivery fee is a collection of standardized fees based primarily on the following factors:

• Credit Score

• Loan-to-value ratio

• Occupancy &Property type

• Cash-out for Equity

• Subordinate loans

Credit Score: If your credit score is 740 or above, you will get lowest delivery fee and lowest rate. The lower your credit score, the higher the fee, as the risk is greater to the lender. It is a tiered pricing chart. You have to go through the pre-approval process for the lender to have an accurate credit score; so this is one area where a quote can change from the beginning to the end of the lending process. Ideally, get pre-approved before making an offer on property.

Loan-to-value ratio: This is the difference between the appraised value of the home and the loan amount. It reflects your equity in the property. If the home appraises at $200,000 for example, and you take out a loan for $150,000, your loan-to-value ratio is 75% and you will get the very lowest delivery fee. If your loan is $193,000, the ratio is 96.5% and your fee will be higher. Be sure to tell your lender how much you have to invest in the home. You get the best delivery fee rate if you put in 25% or greater.

Occupancy & Property Type: Both primary residences and second homes are owner-occupied, so they have the same delivery fee. An investment property that is not owner-occupied, will have a higher delivery fee to reflect the higher risk. A single-family home will have a lower delivery fee than a condo or multi-unit properties like duplexes and apartments. Be sure your lender knows what you intend to buy. Often the lender finds out later in the process that the home is actually a condo or an investment property and then they have to inform the borrower that their rate is now higher.

Cash-out for Equity: Are you rolling in a home equity loan (as many refinance situations)? Will you be taking cash from the equity in the home? These impact the delivery fee. Again, the more information you can give the lender up front, the more accurate your rate quote will be.

Subordinate loans: Are you combining a first and a second loan? Was the second loan used for the purchase of the home or was it closed after the purchase for home improvement? There is no delivery fee for combining purchase money loans together, but there is a fee if the second loan was not used to purchase the home. If you are refinancing only the primary loan and leaving the second loan alone, there may still be a delivery fee depended upon the combined loan-to-value ratio. If you have a second mortgage on the property, be sure to mention the details to your mortgage lender!

Rate Periods

Once the lender has determined the correct delivery fees, they then provide the rate quote based on the correct time period. Your loan isn’t closing the day you get the quote, obviously, so in addition to rates, rating and delivery fee, your lender has to engage in a bit of forecasting before issuing a quote. They now decide what the rate is likely to be in 30, 45 or 60 days and offer you a quote that includes expected fees and rates.

A lender with a good pricing team will be accurate most of the time, which is good for you and for them. Once you lock your rate, both sides are committed. If the price team is off on forecasting and the rates go up, you are protected. If the rates go down (which is less likely in today’s environment of historically low rates) further, then the lender is protected.

It’s a complex financial process and anyone who gives you a quote without completing all these steps will not honor that quote in the end.

Certified Financial Planner™ Bill Shea recommends his clients consult with Guardian for their mortgage needs – and follows his own advice as a long-time Guardian customer. “Every client I have referred to Guardian Mortgage came back and told me that they were educated in the process. They were given a complete understanding of their costs and benefits and were confident they got the best mortgage for their situation.

I feel comfortable making the referral because of Guardian’s strong underwriting and pricing skills. Because Guardian Mortgage services its own loans as well, the relationship will extend years beyond the close, which is also very comforting to my clients who want stability with their financial providers,” Shea said.

Definitions

MBS – the price for pools of mortgages that are securitized and sold in the secondary market, which is determined by the bid and ask price on the bond market for these securities. Just like the price for an equity or bond, the price for the MBS market changes constantly throughout the day given the supply and demand of these investments.

G-Fee – assessed by the investor – most often Freddie Mac or Fannie Mae. The G-Fee went up recently when Congress used the increase to pay for the payroll tax extension. This G-Fee applied to the MBS price to guarantee that the loans in a specific MBS pool have conformed to Freddie Mac and Fannie Mae’s specific underwriting guidelines.

Delivery fees – adjustments to the rate based on the specific loan criteria for each borrower. These are standardized by Freddie Mac and Fannie Mae to be applied by all lenders to conventional conforming loans.

Profit margin – added to the pricing by the lender to get their “gain on sale” of the loan to the investors. This margin is the most obvious difference from lender to lender and is set mainly on the lender’s costs (i.e. payroll and advertising/marketing), loan volume, competitive pressure and required return on origination activity.