Marketing for PMI Removal

[Bobby Bucks]

Does anyone market for PMI removal with any success? By success I mean is the return worth the time and money invested? I used to get about 2 PMI removal requests a month from various lenders and haven't had one in over a year. I suppose the lower rates have been the culprit.....anyone running the numbers simply refinances. I know of a couple of people who spent time and money advertising and soliciting PMI removal and it wasn't all a cake walk. One guy said in several cases it was very frustrating....examples......dealing directly with borrowers is time consuming, sometimes after explaing the concept they would then shop for a cheaper appraisal fee! :-(.....and other times the bank who owns the loan has a policy of using only appraisers on their approved list or AMC. He finally said to hell with it. I expect than in the next few years we will see a lot of activity in PMI removal since most people have refied once or twice and bottomed out rate wise.

 

[Mike Garrett RAA]

Bobby....

Do you have any real estate infomercial type radio programs in your area? How about just local talk shows? If so, call and ask to be put on the program as a public service on "how to reduce your house payments".

 

[Dale Smalley]

I guess with all the refi's we are going to have to wait untill the area has appreciated the 20% they are going to need. Then you can target homeowners that recorded a loan before that date.

 

[Tony Lehn]

Because I'm curious.. Humor me.

I'm fairly new to the business, at least at my own business, and hanging my own shingle. How do you do PMI removal, and justify that with the "no predetermined value" thing? Seems to me that you can't. I mean, as soon as the HO tells you what their current mtg balance is, you know the number needed to get the business.

I bring it up in relation to a thread in the general forum about lenders using HO estimates of value and loan amounts on the orders they recieve. This doesn't seem much different to me.

This is truly just an honest question. I'm not trying to open a can of anything. Just want some response from seasoned veterans.

Thanks

 

[Mike Garrett RAA]

You need to re-read (or read) USPAP...make sure it is the 2003 version. Knowing what a contract amount or loan amount is ...is not necessarily appraising to pre-determined value. Accepting an assignment on the CONDITION[/b] that you come in at that value is.

 

[Will Trueheart]

Tony,

That is a good question. Generally PMI work comes from individuals and not LO's. Usually folks have owned the property for a couple of years and then want the mortgage company to remove PMI from the payment.

One big problem is getting folks to understand what they need to do to get PMI removed. Although I haven't done much PMI work the past 2 years as it seems that many people have elected to refinance their homes and as a result get a lower interest rate and no PMI.

Whenever you deal with the public, I've found that a lot more "people handling" skills are required. It's not necessarily a good practice to do appraisal for people when there is little chance that the value would eliminate PMI. People generally feel "taken" when they pay for a service that does not help them achieve their desired result. So you might want to figure out a method where you are able to do some sort of "preview" to get a idea of market values are before you accept a PMI assignment. BTW the fee for this type of work does not have to be the same fee you charge existing mortgage clients. I've always charge a higer fee ($50) and made payment upfront a requirement.

Good luck

 

[Tony Lehn]

I have read USPAP2003. Like I said, the other thread made me kinda curious.

I guess the key is in accepting and completing the appraisal.

If you are simply doing a check for someone for PMI purposes, and you report what you find, namely the sales data, then give the HO a range that their house may fall into, would that be compliance or a violation?

Again, I'm just interested in your thoughts.

As I read it, that would not be in violation because you can only violate USPAP if an appraisal report has been completed.

 

[Jeff Horton]

I guess the key is in accepting and completing the appraisal.

If you are simply doing a check for someone for PMI purposes, and you report what you find, namely the sales data, then give the HO a range that their house may fall into, would that be compliance or a violation?

If you give the owner a range or any value at all you have done an Appraisal by USPAP and you must have a work file to back up how you arrived the value. But if you have some field notes and the copies of the comps you looked at you have a work file and can show how you arrived at your value. If you never finish a paper report no problem. Its a verbal appraisal and I don't see a problem. Just document what you did and keep the work file just like an other appraisal assignment.

The only hitch I see is the Ethics Rule and fee's. I think and may change my mind on this latter, that for PMI appraisals you just offer to do a free look-see. Pull some comps and give them a range of value. Then if they want to proceed you set a fee.

Or charge them X for doing the look-see and the $Y for the finished report. Just don't say $300 and if I can't make meet your required dollar amount the fee is $50. Thats a violation of the Ethics rule and a contingent value.

 

[Bobby Bucks]

Mike an infomercial has been a consideration....actually the best route in my mind would be a public service announcement provided they would accept it as that. (free) I think the realistic alternative which would get the most results, the least hassles and with no liability from the standpoint of predetermined value would be small print advertisments placed on the regional or national levels in a column format which simply plants the PMI seed, then the borrower will contact the company that owns their mortgage and they do all the annoying part. Maybe the AI would pay for it? I remember doing a PMI removal for a friend once and I essentially did all the work, contacting the mortgage co., asking about their specific requirements and it was a royal pain. In the past when I have received PMI inquiries from the general public, I tell them to contact their mortgage co. and if they allow the borrower to choose the apraiser, THEN call me back.

 

[Bill_FL]

Bobby,

I posted an earlier thread about this, I think I called it.ok I'll start...

Used direct mail, went well.