04.07.14 – Illinois Homes
INSIDER MORTGAGE TIPS: AN INTERVIEW WITH KEN PERLMUTTER OF PERL
Tell us a little bit about your company and its foundation.
I founded Perl Mortgage Inc. in 1994 because I wanted to help provide people access to the American dream of home ownership. We have grown from two people working at my kitchen table to over 200 employees, licensed in 25 states, providing loans to thousands of homeowners every year. We have a customer satisfaction rate of over 97%. We pride ourselves on being large enough to matter but small enough to care.
What are some of the services your company provides?
We are a mortgage banker. We provide both residential and commercial loans. Our residential loans are used by homeowners to purchase or refinance 1-4 family properties. We offer many versions of these loans. When working with a homeowner it is important to determine the product that best meets their needs. Not everyone is a candidate for a traditional 30 year fixed. Some people have more liquidity and want to reduce the total interest outlay and may opt for a 15 year fixed loan and save a tremendous amount of interest. Others may be first time buyers starting their career in a starter home or condo and not need the duration of the 30 year fixed so they may opt for an arm that provides for some significant savings in the early years. This is a very appropriate loan for a homeowner that will not be in a property for long. We offer FHA loans which provide for lower down payments. We offer renovation loans for homeowners to purchase properties that may need some TLC.
How important is it to document my finances?
It has always been important to document one’s finances but now more than ever it is critical to be able to provide the proper documentation for a lender to make a decision on a person’s credit worthiness. Part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act mandated a lenders ability to demonstrate a borrower’s Ability to Repay in order to provide Qualified Mortgages to our consumers. This requires eight underwriting standards that require us to document and analyze all aspects of our client’s income and credit. We can only perform this analysis if we are provided complete, accurate documentation. This means looking at all pages of a bank statement, all pages of one’s income tax returns, seeing W2’s and K1’s if a consumer has any interest in a business. It means reviewing complete copies of trust accounts, divorce decrees and sales contracts.
How do I know if it is a good time to refinance? Is it a good time presently?
Determining the right time to refinance is specific to an individual’s financial position. An easy assessment for most is to see if there is a monthly savings allowed by taking out a new loan. It is important to realize that there is a cost to this new savings. We can provide a “no cost” loan to a consumer, but this is at the cost of a slightly higher rate than if the consumer paid the closing costs. This rate still may be well below their current rate so it may make sense to do this loan. Others come in to refinance because they need some cash out for investment or other personal reasons. Even when rates are not at historic lows, we still find approximately 20% of the loans we provide are for refinances. This may be because an arm is adjusting, someone is getting divorced and paying off a former spouse, want cash to improve the home or want to shorten the duration of their loan from a 30 year to a 15 year. We pride ourselves on providing expertise to our clients to help them determine the best time and best product to meet their specific needs. That is what makes us mortgage professionals. So although rates may not be at the historic lows, they are still competitive today and provide refinance opportunities for many.
What are some bargaining tips I can use when shopping for mortgage lenders?
It is important to find someone you trust. At times we get called when a consumer applied for a loan with someone else and got to the closing table only to find that the terms did not match what they were promised. The better prepared one is with their paperwork, knowing their income, assets and liabilities when calling a lender allows us to make a thorough determination of qualifications right away to provide an accurate rate and product to meet the consumer’s needs.
What are some of my rights as a borrower? How can I use these to my advantage?
The Consumer Finance Protection Board (CFPB), which came out of the financial crisis, continues to enact legislation to protect the consumer. It required a new good faith estimate that is supposed to provide a clearer representation of the costs and terms of the loan. It is designed to match more closely with the closing documents so the consumer can insure that what they get at closing matches what they were promised. The CFPB maintains a complaint site for homeowners to get justice. I would recommend if a consumer feels they are not being treated properly, that they waive that complaint in front of a lender.
Why are many people reconsidering FHA loans? What programs should I consider instead?
Since 2008, when credit tightened, more people turned to FHA because it allowed for lower down payments, lower FICO scores and more liberal underwriting. Agency products that are sold to Fannie and Freddie have more adjustments to the rates based on lower down payments and lower FICO scores which often made the rates on these Agency products more expensive than FHA options.
We saw this transition for a number of years. However, more recently, you are seeing many people come back to Agency loans with MI because HUD has made the UFMIP, (upfront mortgage insurance premium) and the annual mortgage insurance on these loans very expensive to replenish funds in their insurance fund. This has pushed consumers to look at Agency product with traditional MI (mortgage insurance). The traditional MI companies are aligning their guidelines with the agencies and lowering their costs to make them look more attractive for those that have at least 5% to put down.
For those with less than 5% down payment, FHA is still the only option unless one considers rural development, state specific loans or one qualifies for a VA loan.
What are some of my options if I have poor credit?
Credit is an important factor in making a loan decision. If one’s credit is poor it may make sense to work with a credit counselor to repair the credit and apply later. In some instances we work with an investment firm that partners with potential homeowners to purchase a home, rents it back to the potential homeowner, and agrees to sell it them at a pre-determined price at a future date when the consumer’s credit improves. It is important for potential buyers to be regularly reviewing ones credit to see if there are any mistakes on the report and take care of correcting those issues early so they don’t become an issue when it is time to get a loan. Don’t assume credit issues will go away over time. Review your credit, fix mistakes, take care of issues and get the best rate when it comes time to purchase a home.
What is the best way for people to get in contact with you?
People can reach me on my toll free line at 888-LOAN-MAN or via email at firstname.lastname@example.org.
You can see the original interview in it’s entirety at http://www.illinoishomes.com/articles/insider-mortgage-tips-perl-mortgage
05.31.2013 – Chicago Tribune Quotes Ken Perlmutter
MORTGAGE RATES PUSHING HIGHER
Average for a 30-year, fixed-rate mortgage rose this week to its highest level in a year
By Mary Ellen Podmolik, Chicago Tribune reporter | MAY 31, 2013
Mortgage interest rates have moved much higher than they were just a few weeks ago, and there’s consensus that just as home prices have moved off the bottom, so have mortgage rates.
On Thursday, Freddie Mac reported that the average rate for a 30-year, fixed-rate mortgage rose this week to its highest level in a year, 3.81 percent, compared with 3.59 percent last week and 3.75 percent a year ago. The average rate of 2.98 percent on a 15-year, fixed-rate mortgage compared with 2.77 percent last week and 2.97 percent in the comparable year-ago period.
Those rates do not include the various loan-level price adjustments that lenders layer atop rates to mitigate their credit risk.
Credit, or blame, the increases on an improving economy with positive reports on housing, unemployment and consumer confidence, as well as increased speculation that the Federal Reserve may curtail its policy of monetary easing, which has long put downward pressure on mortgage rates. On Wednesday, the yield on 10-year Treasury bonds was 2.12 percent, half a percentage point higher than six months ago. Mortgage rates closely track Treasury note movements.
Experts don’t expect the ultralow rates — a rate of 3.35 percent was recorded earlier this month — to return anytime soon. In fact, some predict that rates will hover near 5 percent within a year. Pushing them much higher than that would require a large drop in unemployment or the presence of real inflation.
“We’ve already passed the absolute low point,” said Lawrence Yun, chief economist at the National Association of Realtors. “The economy is doing better, which means there’s less fear among the bond investors.”
An increase in rates, say to 4.125 percent from 4 percent, would add $15 to a monthly payment on a $200,000 loan. The continued upticks are expected to spur would-be buyers into activity.
“Perception is everything,” said Bob Walters, Quicken Loans’ chief economist. “It absolutely gets people to come off the fence. We see that time and time again. People come to the realization that they need to act more quickly.”
The uptick already is quashing the refinance market. On Wednesday, the Mortgage Bankers Association reported that applications to refinance existing home mortgages fell 12 percent last week, in a third consecutive weekly decline. Applications for loans to buy a home rose 3 percent from a week earlier.
“The number of refinances will go down, absolutely,” said Ken Perlmutter, president of Perl Mortgage, Chicago. “They’re not going back down to their lows.”
Experts expect some weekly volatility in the market going forward. As a result, Perlmutter told homebuyers Wednesday and Thursday not to lock in their mortgage rates since they wouldn’t be closing on purchases until mid-summer. Instead, he advised them to wait for a day when rates moderate a bit.
12.31.12 – National Mortgage News Recognizes Ken Perlmutter
Company Owner Is Still In Trenches, Seeking Leads
By Brad Finkelstein | DEC 28, 2012 5:54pm ET
Ken Perlmutter remains a top producing day-to-day originator, giving him a perspective he shares with his sales staff.
When it comes to providing advice to a sales staff, Ken Perlmutter, who is one of the owners of Perl Mortgage, can do so with some authority and talk with them about dealing with current business conditions. He finished 45th on the 2011 Origination News top 150 producer list, with $75 million. With 2012 ending today, he has originations of $57 million.
Perlmutter got into the mortgage business from doing sales for Allen Bradley (which was in industrial controls) for a very simple yet common reason—he was looking for a position where he could earn more money.
At the time he started in the business in 1993, his wife was pregnant with their first set of twin boys (four years later they would have a second set of twin boys) and seeing well into the future Perlmutter was looking to start saving for their college educations so they could attend any school they desired.
So he started moonlighting in the mortgage origination business. He and his wife had refinanced their own home for the third time in several years and at that last refi, the new mortgage broker compensation disclosure rules had come into effect.
“I saw how much money he was making and I realized how long it took me and how much work I had to do to make that amount of money doing what I did for a living,” so Perlmutter asked the originator if there was any way he could get into the mortgage business.
So he started working at night, working telemarketing leads and did that for several months. But having an entrepreneurial bent, with a wife who at the time owned her own business, Perlmutter opened Perl Mortgage in October 1994. He brought in a partner, Steve Laner, in 1998.
Both are top producers and that gives them that unique viewpoint when it comes to dealing with the sales force. Perl Mortgage is going to fund $1.6 billion this year, centered in the Chicago area.
“We’re a pretty good-sized company and the owners are producers. We get it, we know what our loan officers go through because we live it every day,” Perlmutter said. “I’m in the trenches every day.”
The company prides itself on the number of high-volume producers it has working there. Perl Mortgage has five people on the ON Top 150 list, including Laner at No. 86.
He said any tools that he needs to write a loan is the same as any of his producers big or small need. He works with the people who produce $50 million and those who do just $10 million or $20 million.
“I know what it takes to get it done,” and has a feel for what these originators need in terms of support.
He added he does play golf and does make time for family activities including being home for dinner every night, but otherwise has very little use for idle time.
Perl Mortgage has “an amazing management team” which he supervises, plus he still enjoys writing loans.
The company is growing. Until recently it had just five offices in the Chicago area, although able to do business in 14 states.
This past year some changes at the company that made it stronger and its ownership more comfortable with establishing a footprint in other states. So it has opened offices in Wisconsin, Indiana, Michigan and Oklahoma, and is licensed in 16 states total. For 2013 it is looking to add a presence in other Midwestern states.
For his own business, Perlmutter’s main source of leads is from referrals; he uses Mortgage Returns to aid him in mining his past clients.
But even before starting to use Mortgage Returns he always worked that database, he noted. “My byline is ‘your lender for life.’”
He tried to stay in touch with clients up to 12 times a year through calendars, cards, newsletter and the like. Perlmutter also has an email that goes out every Monday morning, called “Mortgage in a Minute,” discussing such trends as rate movements.
When it comes to social media marketing, Perlmutter does have a LinkedIn account. Perl Mortgage has a fan page on Facebook.
The company also does video blogs on current real estate topics. Some of those videos, he noted, have a humorous twist. Video makes the topic more alive for people and they relate better to it, he said.
On the B2B side he works with investment advisors, attorneys and a couple of Realtors, he said. But the majority of his business comes from that database of between 1,800 and 2,000 people.
Perlmutter is still getting business from contacts he made going back to the days when he was just doing mortgages on the side.
He stays in contact with the people he worked with at Allen Bradley 20 years ago and he still does their loans as well as loans for people he called on as a salesman at that company.
The philosophy for keeping contacts for that long is very simple, he said—“do the right thing.”
Given his background in electrical engineering, “I love to analyze numbers, I like to help people. I think this is a great business; we’re doing wonderful things for people.
“We give quality loans to those people who deserve it. So everyone is a potential client,” Perlmutter declared.
He looks at what the people are trying to accomplish with the mortgage before recommending a product to fit their needs.
Perl Mortgage is a mortgage banker that funds the vast majority of its production; it does broker certain products.
As a mortgage banker, the company has much more control of the transaction; it became one in 1998 after the wholesaler it was working with, InterFirst, said it was too busy to close a purchase deal.
What helped Perlmutter and Perl Mortgage survive the downturn, he said, was being conservative and concentrating on doing quality loans.
Both Perlmutter and his partner live off their loan commissions, allowing them to leave assets in the business and build net worth. That net worth gave the warehouse providers’ confidence in the company and it is now allowing it to grow.
As for the support the company provides its staff, it has a loan officer assistant program, where each LO is teamed up with an assistant; high-volume producers get a dedicated assistant.
That is a change the company adopted because of the new reality of the mortgage business where there is now so much more paperwork required with a loan. “We rather have the sales people go out and sell as much as they can and we’ll give you some support in the office,” Perlmutter said.
He is part of a group called Vistage whose branches consist of 12 to 16 company CEOs and have monthly meetings. In sense they serve as his board of directors and serve as a sounding board for ideas.
He has been able to accomplish the financial security he wanted when he started in the mortgage business. The older boys are sophomores at the University of Michigan while the younger ones are sophomores in high school.
By doing the right thing for the consumer, it ends up being the right thing for his business. And both individually and as a company he is poised to capitalize on the years ahead, helping qualified borrowers get the money to purchase a home.
10.26.2012 – Perl Mortgage Receives 2012 Best of Chicago Award
Perl Mortgage has been selected for the 2012 Best of Chicago Award in the Mortgage Brokers category by the Chicago Award Program.
Each year, the Chicago Award Program identifies companies that we believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and our community. These exceptional companies help make the Chicago area a great place to live, work and play.
Various sources of information were gathered and analyzed to choose the winners in each category. The 2012 Chicago Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the Chicago Award Program and data provided by third parties.
SOURCE: Chicago Award Program
Chicago Agent Magazine Cover Story featuring PERL’s President
Ken Perlmutter, President of PERL Mortgage, was recently featured in the cover story of the October 2012 issue of Chicago Agent Magazine. The article, ‘FHA Changes, Jumbo Loans and Low Appraisals: A Lending Update’, highlighted five mortgage industry leaders who were interviewed regarding their expertise and opinions on important topics concerning the lending industry such as industry trends, changes and updates. Click on link to read full article: http://chicagoagentmagazine.com/fha-changes-jumbo-loans-and-low-appraisals-a-lending-update/
PERL Mortgage Ranked Top 50 in the Nation
PERL Mortgage is ranked number 46 out of the top 100 lenders in the country according to Mortgage Executive Magazine’s Top 100 Mortgage Companies in America 2011 rankings. The extensive rankings were based on closed mortgage volume and total units closed.