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ZickHomeLoans.com
If I
Join, When do I get Promoted?
My stepson, Jeremy,
just got a job with a great company. However, he
found out that his compensation is four steps below
his next promotion. How sad. He has been there for
two months and is already thinking about a
promotion! It may take years!
But the other side of the coin, it is good news. The
best of employees always think about promotion.
With Freedom Equity Group, when you are doing the
All Fund Mortgage business, we start you out at 25%.
Normally there are three points on a loan. One is on
the front, and seen by the borrower, and two come
from the lender or “on the back” as they say.
So a typical $500,000 California loan would pay
$15,000 in total, $3,750 for the Loan Originator.
(That is you…you start out as a Loan Originator.)
All you have to do to get a promotion is do five
loans. If you are going to be a producer at all,
this is easily done. In the industry, five to ten
loans a month are common for experienced people.
Once you have done five, you get promoted to 35%.
Cool. But the bigger pay is not as important as the
potential. If you are at 35%, and you recruit
someone at 25%, you will be getting an override of
10%. So on the example loan, you would get $1,500.
Now there is another way to get a promotion. If you
start out by signing people up right away, you might
have your team do ten loans before you do one. Fine.
Ten team loans will get you promoted to 35% too! But
maybe you see the problems.
Problem number one is that if you are at 25% and the
team is at 25% you don’t make the money as an over
ride. Real shame. But that just gives you more
reason to get your five loans done quickly.
There is a second problem from our point of view. If
you only recruit and never do a loan, you might not
know all the "ins and outs" of doing loans. The best
way to both learn and earn is to do some loans
yourself. You can see the logic. Even if you know
the loan business, there are policies that you will
not be exposed to until you do a loan. Furthermore,
this company is built by “upper management”, that
will be us, training newer recruits. This internal
one-on-one mentoring is imperative to production.
This is why the Mortgage Business Builder Boot Camp
training was created. You go, when you send
recruits, they pay you $500 out of their 25% on the
first three loans. This way the supervisor will not
begrudge doing the training. This way the recruit
will pay for one-on-one training, but only if they
make money. It seems great to me.
If you are interested in the training, I encourage
you to go to
www.freedomequitytraining.com to sign up. If you
are not signed up with Freedom Equity Group, you can
join at
www.zickhomeloans.com. They have buried
the “Employment” button but I promise it is there on
the left. Call Karen’s office at 281-360-9598 if you
get in the middle of the application and have a
problem.
BZ
Inman is a 'pay for access' news
source. The following is the third of three articles
we have permission to re-print. They should help you
investors understand why lenders are so hard on flip
deals, the number one source of loan fraud. It
should also make those of you in our Loan
Origination program realize why our lenders are so
hard on checking the details! Enjoy.
From
Savings and Loans to Whitewater
Part 3: Real estate's most wanted
By Samantha
Peterson
Inman News
Editor's note: With billions of dollars flowing in
and out of the real estate industry each year, the
industry sees its share of fraud and other criminal
misdeeds. In this special three-part series, Inman
News uncovered the most common schemes, infamous
scandals and a host of fraudsters who are still on
the lam.
Straw buyers.
Inflated appraisals. Falsified loan applications.
Fake W2s and bank statements. Interfering with
officials from the U.S. Department of Housing and
Urban Development.
The different ways
of committing real estate fraud are seemingly
endless. And the amounts seem to vary just as much,
from just a couple hundred dollars to scams worth
upwards of millions and occasionally billions of
dollars. But the ones with higher dollar amounts and
those involving top officials attract the most
attention.
Here's a sampling
of some of the most notorious and largest real
estate frauds in recent history.
The Savings and
Loans scandals:
What roundup of
real estate fraud would be complete without a
discussion of the S&L scandals of the 1980s? The
topic is so massive that entire books have been
written about it, but it all boils down to real
estate.
Savings and loans
were originally created to accept savings from
private investors to provide home mortgage services
for the public. The first U.S. savings and loan
association was founded in 1831 and the concept grew
from there, with some periods of rapid expansion
such as after World War II.
The federal
government's moves to deregulate the industry in the
1980s allowed savings and loans to offer a broader
range of services than they had ever been allowed to
offer in the past. The deregulation allowed savings
and loans to enter the business of commercial
lending, trust services and non-mortgage consumer
lending, according to Encyclopedia.com. One of the
moves changed the deposit insurance from $40,000 to
$100,000. Some observers have said that extension
encouraged savings and loans to engage in riskier
loans because they knew they'd be covered by
insurance.
Later changes
permitted savings and loans to make secured and
unsecured loans to a wide range of markets, allowed
developers to own the institutions and allowed
owners to lend to themselves. The institutions began
large-scale speculation, particularly in real
estate, according to Encyclopedia.com.
Because of that,
and the inexperience in handling different types of
loans, more than 500 savings and loans were forced
to close in the 1980s. The federal government
eventually approved a bailout plan in 1989, but the
true cost to taxpayers is still up for debate.
Estimates have ranged from $500 billion to more than
$1 trillion.
One of the most
notable and most costly savings and loan scandals
involved Lincoln Savings & Loans, owned by land
developer Charles Keating. Prosecutors alleged
Keating generated $82 million in bogus profits with
the sale of land at inflated prices to straw buyers
who financed the purchases with loans from Lincoln.
Keating was found guilty of fraud, racketeering and
conspiracy.
After federal
regulators seized control of Lincoln, they found
that although its core business was supposed to be
making low-risk residential mortgages, almost 67
percent of Lincoln's assets were high-risk land
ventures and commercial development projects.
Whitewater and the
Clintons:
Whitewater became
a household term in the 1990s during Bill Clinton's
presidency, though few in the general public know
that the complicated investigation began with real
estate.
Whitewater was the
popular name for a failed 1970s Arkansas real estate
venture by the Whitewater Development Corp. Clinton
and his wife Hillary Rodham Clinton were partners in
the deal, along with friends James and Susan
McDougal. The partnership bought 220 acres of
riverfront land with the goal of selling lots for
vacation homes. The partnership did poorly, however,
and dissolved in 1992. The Clintons reported a net
loss of more than $40,000.
Whitewater had
been backed by the Madison Guaranty Savings and
Loan, which went bankrupt in 1989, according to
Encyclopedia.com. The McDougals also were
controlling partners in the thrift.
The Clintons
denied any wrongdoing as accusations surfaced over
improper campaign contributions, political and
financial favors and tax benefits. Special
prosecutor Kenneth Starr investigated Whitewater in
1994, as did congressional committees in 1995-96.
In a 1996 trial,
both the McDougals and Jim Guy Tucker, Clinton's
successor as Arkansas governor, were found guilty of
most of the fraud and conspiracy charges Starr had
brought against them. The charges were related to
the complex loan-swapping schemes that helped
destroy the McDougals' savings and loan, according
to a special report from The Washington Post.
In another trial
that same year, two Arkansas bankers were acquitted
of some charges and the jury deadlocked on other
charges.
Starr in 1998 won
permission to expand his inquiry to include the
Monica Lewinsky scandal. Questions about Clinton's
relationship with Lewinsky overshadowed Whitewater
matters, and Starr's scope eventually included a
range of accusations of fraud, obstruction of
justice and abuse of power, all of which contributed
to the public forgetting that Whitewater initially
began with real estate.
Interfering with
HUD officials:
Another real
estate related fraud at the federal level involved
James Watt, Ronald Reagan's Secretary of the
Interior. After he left that position, he was
indicted on 41 felony counts for using his
connections at the U.S. Department of Housing and
Urban Development to help his private consulting
clients get federal funds for housing projects in
several states.
Watt acknowledged
that he had received $500,000 from clients who were
granted favorable housing contracts after he
intervened on their behalf. He was eventually
sentenced to five years in prison and community
service, according to news reports.
Household Finance:
In 2002, mortgage
lender Household Finance agreed to settle with
government regulators and pay up to $84 million to
consumers nationwide. The mortgage lender had been
accused of practicing unfair and deceptive lending
in the subprime lending market.
Attorney General
offices and banking and financial regulators had
coordinated their efforts after identifying a
pattern of complaints from borrowers who said they
had been misled into agreeing to home loans with
different and more expensive terms than they had
originally been promised.
The settlement
resolved allegations that Household and its
affiliates misrepresented home loan terms, deceived
consumers about credit insurance and charged
excessive loan origination fees and prepayment
penalties. Under the settlement terms, Household
agreed to limit prepayment penalties to only the
first two years of a loan, ensure that new loans
provide a benefit to consumers prior to making the
loans, limit upfront points and origination fees to
5 percent, improve disclosures to consumers,
reimburse states to cover the costs of
investigations and eliminate "piggyback" second
mortgages.
Visit
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