After years of close-to-zero levels, the Federal Reserve has raised the Federal Funds rate by a quarter of a percentage rate to 0.50%, effective December 16th. This move is prompted by further signs of a strengthened economy, such as the reported 211,000 new jobs produced in November (exceeding economists’ expectations), coupled with a steady 5% unemployment rate. The question is this: what does the shift mean for lenders and mortgage professionals?

Loan Interest Increase for Big Banks

Lenders will mirror the Fed?s increase of the Federal Fund rate by raising their own loans’ interest rates. Big lenders like JP Morgan Chase, Citigroup, HSBC, and other announced that their initial increases would go into effect on December 17th, just one day after the Fed?s announcement.

Prime Gets a Boost

The prime rate, the figure commonly used to determine interest rates on interest-incurring debts like mortgages and credit lines, is the key figure to consider here. Prime is typically higher than the Fed’s funds rate, so the hike in the latter typically means a proportional hike in the former. In this case, the current 3.25% prime rate is expected to rise to 3.5%.

Financial experts say that as long as the economy continues to improve, Fed rates will continue to rise. The effects of these hikes will be felt over the coming months, but the current move is a promising first step for lenders and mortgage professionals alike.

As the Economy Goes, So Go the Rates

It is important to keep in mind that while the Federal Reserve is often thought of as having the power to control interest, their influence extends directly only to short-term rates. The typical 30-year mortgage is a long-term debt, which is under the domain of the 10-year Treasury Bond. Adjustable-rate, one-year mortgages are more correlated with short-term rates, but these make up a far less significant portion of the market.

The Federal Reserve is a powerful force in the financial sector, and their decisions affect all loans: mortgages, auto, credit, etc., but other market forces can have far more significant impact. In 2014 alone, concerns about economic shifts in Europe and China caused mortgage rates to vary by a whopping .76%, between 4.43% and 3.67%. In the end, long-term mortgages are more affected by the prospect of economic growth and currency valuation than Fed Fund rates.

Partner with Acuity National Real Estate Solutions

Acuity National Real Estate Solutions is a national title agency that prides itself on providing comprehensive services to lenders, real estate agents, and mortgage professionals to expedite the closing process. For more information about our team, please visit our homepage today.

In 2011, the online real estate database Zillow partnered with Yahoo! Real Estate to create the largest online real-estate advertising site in existence. The site now lists properties for sale, helps consumers find agents in their area, allows prospective buyers to search and compare mortgage rates, and gives sellers estimates on the value of their homes. Over the last four years, Zillow has managed to expand its reach by purchasing real-estate listing sites like Postlets, Buyfolio, and Trulia. Not to be outdone, Google has now added a mortgage comparison feature to its insurance comparison tool called ?Compare.? We?ll tell you what you need to know to set yourself up for success in today?s digital age.

Google Partners with Zillow to List Mortgages

People search for practically everything on Google, and it only makes sense that Google would try and enter the mortgage arena. To do so, Google partnered with LendingTree and Zillow. Compare has been up and running in the UK for some time and is currently in use in California. Soon, prospective buyers nationwide will be able to search for mortgages, read reviews, and compare loan rates on Google. This makes it more necessary than ever to get yourself listed on Zillow and LendingTree.

Does Google Compare Pose a Threat to Lenders?

Google is good at what it does, and there?s little chance that it will fumble with its mortgage comparison tool. Users in the UK and California are saying that Compare is simple, user-friendly, and multi-faceted. In the end, Google Compare should prove beneficial to those lenders that know how to use it?in much the same way that Google search is a boon to any business that invests in search engine optimization. Ideally, Google Compare will allow the best lenders to rise to the top and garner more business than competitors.

Setting Yourself up for Success

Because Google Compare draws the majority of its information from Zillow and LendingTree, lenders need to invest some time in getting to know those sites. If you haven?t already done so, sign up! With Google Compare, the average consumer will have easier access to online reviews and rate comparisons than ever before. This means that realtors and lenders must put more effort into garnering positive reviews online.

Title Insurance and Closing Services from Acuity National Real Estate Solutions

Acuity is a national title agency that uses the latest technological advances to provide lenders and loan officers with unsurpassed title insurance, rapid closing support, and leading-edge CFPB compliance. In the same way that Google Compare will become a one-stop shop for mortgage shopping, we at Acuity have made ourselves a one-stop shop for title insurance, closings, abstracting, and notarization. For complete information on Originator IQ, the lending industry?s best-kept secret, visit our homepage.

National Mortgage News recently spoke with some of the most successful loan officers in the nation to figure out their secrets to success. Oren Orken from Chicago?s Guaranteed Rate originated over 100 mortgages worth approximately $32 million in the past year, which placed him at #176 on the annual ?Top Producer? rankings. Below are Orken?s personal story, marketing strategy, and some keys to overcoming adversity he?s learned from his years in the industry. If they?ve worked for him, they may very well work for you too.

How Did You Get Your Start in Real Estate?

A Chicagoan through and through, Orken studied at DePaul University on the city?s North Side, earning an MBA with a concentration in real estate finance. He worked at a variety of companies before landing at Chicago?s Guaranteed Rate, including Bank of America Home Loans, Wells Fargo, Capital Funding Mortgage Co., and Perl Mortgage. If Orken?s success serves as any guide to aspiring loan officers, the message is clear: it?s OK to hop around from company to company until you find a good fit.

What is the Most Successful Marketing Strategy?

To capture new mortgage business, Orken began co-hosting open houses with real estate brokers. He would read through the list of broker open houses on Mondays and cold call the agents to see if they would let him co-host. Though the majority didn?t say yes, he picked up a couple of agents very quickly and they began sending him regular business.

How does one Address the Needs of the Local Market?

Because his particular area of service has lots of condos, Orken made himself an expert in the FHA and VA approval and exception process. When realtors have to deal with difficult projects related to condos, he?s become a go-to option.

How can one Overcome Difficult Loan Scenarios?

Orken describes working with a borrower who came to the U.S. from Spain. Because he had to work with human resources officials in Spain during Spain office hours, the project proved quite difficult. Rather than dragging his feet, Orken went above and beyond and helped fund the client quicker than most ordinary cases. The borrower appreciated the effort so much that he came back to Orken three more times?once for a purchase and twice for refinances.

What Lessons do Loan Officers Learn Over Time?

The most valuable lesson Orken has learned in his years as a loan officer is that you must take good care of your team. It?s a symbiotic relationship; when he does his part, his team helps him push his loans through on time so he can deliver to his customers and remain in compliance.

Working with Acuity National Real Estate Solutions

Acuity is a national title agency that works with realtors and loan officers to facilitate rapid closings. With recent changes to the disclosure process (TRID), timelines are more important than ever. Our cutting-edge process combines advanced origination technology with the traditional business virtue of thoroughness, expedience, and close attention to detail. For more information on how we serve loan officers, please visit our homepage.