Aerial view of a packed baseball field

Winners, Losers, Spectators and Cheaters!

It seems high profile sports teams and athletes are cheating more (or getting caught more). Deflategate and Sign Stealing are just two examples of prominent teams and their leaders caught cheating.

It’s not just players and coaches, sometimes the referees are the culprits. In 2007, a referee served 13 months for “point shaving,” which for those unfamiliar, means making calls to change scores.

However, one thing I don’t see is spectators cheating to change the outcome of games we love. Yes, the home field advantage may sometimes be real, but I can’t recall fans causing teams to win or lose directly.

With the big game behind us, let’s focus and draw an analogy to the cheaters (cyber-criminals) in our game (closings). Unlike sports, these cheaters are not the players, coaches and GMs (or in our business known as parties, agents, mortgage pros, builders and attorneys), they’re the spectators (Cyber Criminals). These spectators are not our fans, but they are constantly on our field.

Cyber criminals are the spectators for at least two reasons, (1) they are watching us, all of us, whenever possible through “broadcast TV” (known as internet) and (2) they aren’t supposed to be in the game or impacting the game but they are!

One headline from a CNBC headline dated 9/11/19 notes, “Email wire fraud is so simple for criminals to pull off, its cost companies $26 billion since 2016, says FBI” It hasn’t just cost companies billions, its costed individuals and society billions.

There are several cases throughout the country where hundreds of thousands of dollars to millions of dollars, has been intended to be wired to an escrow account but went to a criminal, some of which reside right here in the USA and some throughout the world. Sadly, it will happen again and these criminals will often get away with it!

Cybercriminals are here to win, and all of us, who are supposed to be in the game (e.g. parties, agents, loan officers, builders and closing agents, etc.), have to play hard and smart to assure the Cyber Criminals lose!

They want to win one thing – our money! It could be money to or from a firm’s escrow account, a broker’s escrow account, lender proceeds and buyer and seller funds. Cyber-criminals watch us all to find the weak link and go for the score! One win is a tragedy for someone, but these criminals win too often.

Our field of law has often been described as “happy law.” In fact, our slogan “Everyone Walks Away Happy ©”describes what we want to always happen. When we came up with the slogan, this type of cyber fraud was rare or non-existent.

Today in order to win we have to all work together to ensure victory. In sports, teams win with a game plan! So what is our plan? I lay it out below:

  1. Like any team, we start by not underestimating our opponent! The opponent is not your “co-op agent (short for cooperative), the parties, lender, the builder. Our opponent is the cyber-criminal. Our opponents are smart, even perhaps brilliant and they are ruthless lawbreakers. So, let’s acknowledge we face a formidable opponent!
  2. As the current ad says, “Stay in your lane bro!” If you’re an agent do not ask for wiring instructions, don’t offer to collect the Seller or Buyer info sheets. You have done the “heavy lifting” and while you don’t want to actually obtain or provide these items, you can certainly speak with your client and Shafritz & Dean (or another firm) to confirm things are being done timely. The cyber-criminals most often breach the “weakest technology link,” in the transaction. Lenders and closing firms spend thousands and even millions of dollars to safeguard NPPI (Non-Public Private Information). Most often, the spectator has their eyes on the agent who is more likely to use Gmail, etc. with limited investment in cyber protection.
  3. Great coaches are great communicators. Coach your clients and those sending funds to call the law firm for wire instructions or receive them through secure emails, and to verify by calling only the number you provide the party face to face or after a thorough internet search for the accurate information. This would also apply if brokers were holding earnest money (EM). One common scheme we see ourselves is the cyber-criminals telling parties something like “today is a busy day. Don’t call me just email me with any questions.” Tell your clients about this because it is almost certainly a fraudster masquerading as the closing firm employee. Insist they call and speak to someone at the firm directly.
  4. The old expression that the “devil is in the details” applies. The best teams pay attention to the details. Look closely at any email instructing you or your clients to wire funds. Both you and your clients must hover over the email address/name & check to ensure the addresses are correct. Criminals often are outside the country and their English (or computer translation) sounds nothing like any professionals English. Often the sentence is incomplete, partially incoherent and if it did not work, funny.
  5. Keep learning! The game is always changing. The criminals are always learning and adapting so we have to as well.

Remember we want to win the game, celebrate a milestone event and while there is no “I” in team there are two “i’s” in criminal. Go team and let’s win!

Large home on a foggy night

5 Easy tips to avoid scary surprises at the closing table

As we enter the “spooky” season, scarier than Freddy Krueger, scary surprises, leading to anything other than “everyone walks away happy” at their real estate closing.

Agents, Loan officers, Parties and Closing firms can do much to avoid Frightening results at Closing. Today, we want to share 5 easy tips for all to consider regardless of the attorney, Agents, Loan Officers involved in A Closing. These tips apply Across the the industry. Do these 5 things and you have Much Better odds of avoiding a Monstrous closing.

Tip #1: Maybe some “see Dead People” but most of us don’t communicate with ghosts

Take-Away – Emails (and for that matter Texts) are like talking to ghosts. If there is no response on the other end, you haven’t communicated. Proving you sent an email might clear your conscience but won’t solve the problem and prevent a delay. Insist on a response and if you don’t get one follow up early. Unlike talking to ghosts, make sure your partners and vendors are really communicating with you.

Tip #2: That Hairy Werewolf will Get you every time…

Translation: Failing to do the right due diligence every step of the way is how the hairy deals Bite us at the Table. When we start with a borrower, buyer and a Seller, we need to know everything that could impair title, cause qualification problems with the loan prior to the Day of closing. So go hard early with loan approval and title work and always check in with one another early to address possible problems, below are a few common ones:

One Seller – Two on Title = Possible dead person in immediate back chain.
Tax Deed = Seller you represent may or may not have authority to sell.
Open Equity lines really scare Title insurance Companies and every effort needs to be made early to find the lender and obtain a cancellation.
Of course there are lots of examples of challenging situations for all of us, divorce, bankruptcy, etc. and we just talked about a few but the key is to deal with them early!

Tip #3: When the master thieves in oceans eleven made off with the big diamond at the Casino, every Detail was known and committed to memory.

Translation: The Contract and the Federal Lender Requirements must be known by all professionals and conveyed to the parties.

We, along with the agents and lenders have to know every detail and make sure the “rules” and the deadlines are adhered to. If your are the agent, don’t be a Day late on a Deadline! The other side doesn’t have to be nice and extend (unless the contract allows for a curative period). Example a Day Late for loan application or due diligence per the contract might cost the buyer their Earnest Money. Another example, If you are the Lender, Attorney and even Agent for the buyer, under CFPB, You have to know the last day for the three days prior to closing to Get out the CD to the borrower. Lenders can’t make an exception if the closing is governed by Tila/Respa … so it’s up to the people – loan officers, processors, closing firm staff and even agents to make sure the rule is adhered to.

Tip # 4: Scared of the Dark? Take Inventory of the surroundings before you turn off the light!

Translation: Don’t Get to The Closing Table without reviewing and correcting everything you could see if you just looked at the Final ALTA and/or CDs.

Law Firms, Realtors and Lenders (and parties) – Check the final ALTA Settlement Statement (or HUD-1) and make sure Lender and Law firm have the Names, Zip Codes, Dates, Bottom lines, Vendor payments etc. correct before we are sitting together at a closing. It may seem like no big deal but misspelling a last name by a lender (even if an Attorney has it right) can lead to an extra hour at the table – the lender to create a whole new package and some are faster than others. Heaven forbid we missed a Fee to the buyer Borrower requiring more money, now we are talking about going back to underwriting.

Tip#5: Where, When and Who is always important in any horror or suspense film.

Translation: Where, When and Who (and I’ll add one more What) is just as Important the Day of closing!

Where: Unfortunately, once you grow and have two offices (or More) for closings, murphy’s law says one party will end up at the wrong office unless the location is clear and conveyed to all persons. We want the parties to be happy and the professionals to shine, and when they go to the wrong office, that’s stress that should have been avoided.

When: Make sure Everyone is on the same page too with date of closing and time!

Who: Seems easy enough but it’s not uncommon for the Seller or Borrowers on a refinance to think only one spouse has to be at closing.

What: What is needed for day of closings: Funds – anything over $5,000 requires by GA law a wire, so Parties required to bring funds need Good Wiring instructions and to avoid tragedy should search for a valid Phone number for the law firm and confirm the instructions with the firm. What else? Valid ID – A closing can’t disburse without that valid ID no matter how well or unknown to agents and lenders the parties may be. To protect everyone from Fraud (scariest thing to all of us), we have to receive and review the ID!

So there you have it 5 easy tips which should allow us all to walk away happy from the closing table even on Halloween or for all of us Even Scarier, A Friday falling on the last business day of the month!

Lit light bulb

Bright Idea

Are you a realtor who wants a reason to make that call to your former clients? How about a loan officer who wants to find a way to add value to their favorite real estate professional?

You likely know mortgage rates have dropped by nearly 1% since last August but you would be surprised how few of your clients are aware of the significant drop in rates. I recently heard rates are the lowest they have been in three years. So I researched it and last year the average Freddie Mac 30 year Rate was 4.55 with .55 Discount point. By contrast today rates are according to Feddie Mac is 3.6% with a .6 discount point (Freddie Mac published average on 8/8.

So maybe you are thinking – how does this help me if you are an agent? Well, we mentioned this to one of our many favorite agents, who has only been in the business 3+ years, and suggested she reach out to her clients and share the following idea. So often I hear my agent friends tell me they have “call reluctance” so we wrote a script for making the call:

“HI _______, did you know rates have dropped nearly a point since last year alone while values throughout metro atlanta have continued to rise. The result is this is a great time to contact a mortgage pro and have them review your current mortgage with you. You may be able to save significantly each month or go from a 30 year mortgage as example to a 15 year term and shave many years and much interest expense from your financial future. Please let me know and I can reconnect you with the loan officer I referred originally or introduce you to one of the many great pros I work with.”

This new agent did this and reconnect her buyers and lenders. In just 1 week, the results really were incredible:

  1. Out of approximately 30 closings, approximately 6 persons refinanced saving hundreds of dollars monthly in some cases with little to no cost.
  2. All of the clients were happy to hear from the agent.
  3. The loan officers appreciated her redirecting her clients back to them.
  4. And here’s the kicker, a couple of the people wanted to look at possibly buying another home due to the low rates.

Talk about a win-win win for the owner, the lender and the agent!

What an easy call to make. I encourage every loan officer to take this idea to their database of agents and agents to take the message to their clients. Of course we are here to help you get them closed but we would love to hear any success stories from this idea.

Good luck!

$100 Apple card with SCAM written across it

Beware of Email Scams

Phishing Schemes are nothing new but here’s something that plagued our firm on the first Monday (Jannuary 7th) and it’s worth letting you know about it.  It was a busy morning when all of our staff received the following e-mail –

“Hi First Name, Are you at the office? I am on a conference call & its not likely to end soon,Wondering if you could help me dash to the store quickly?”

Fortunately, just about every staff person ignored the email because they recognized it was “not my voice.”  However, the next email requested that the individual(s),

“Okay First name,I am still on conference but will be rounding up soon & I need gift cards for a group of clients i will be meeting with this morning, Kindly confirm if you can help get 5 x ($100) =$500 of iTunes gift cards at any of these stores nearby (CVS,Walmart,Walgreen & Target) ? I need them emailed to me preferrably ahead of the meeting,So you can send them to me via email as soon as you get them. Have the PIN number at the back of each card revealed by carefully scratching off the film that needs to be scratched & clearly capture Pin Code on each card with your phone.You will keep the hard copies & invoice for accounts/reimbursement,I prefer the physical gift cards for reference & record purposes. Let me know if you understand this instructions clearly? Thank You

Now there were  clues which registered with our staff – first, if I needed someone to do something for me that involved spending firm dollars for the benefit of a third party, I would call that person.

Next, the idea that I would ask as staff person to take pictures of the gift card and send the pin code is not something I would ever do nor would likely any legitimate requestor.

If the clues were not enough, there are a number of actions the staff could and did take before following the fraudster’s request.

  • Hover over the email sender purporting to be me. That will tell the staff person, that the email really was not from me.
  • The staff person could call me or text me to see if this was really a request. They would of course find  out that it was not a legitimate request.
  • The staff if they thought about both emails would likely question the syntax, tone and request itself.  Some people might ask one to dash off to a store or kindly confirm or clearly remove film and clearly capture Pin Code but that doesn’t sound anything like the way I communicate.
  • The staff person could look at the calendar and in this case there was no evidence that I was in a conference, conference call or meeting scheduled that would possibly prevent communicating with staff.

As business owners –

  1. We sent out an email encouraging all phishing schemes be reported to the entire firm to avoid any one person being duped.
  2. We initiated a requirement that any email requesting funds must not be fulfilled prior to calling/texting the requesting party to confirm the request.
  3. We trained the firm on identifying phishing schemes and especially reminded staff that hoveing over the email sender’s address is critical if anything seems

Why am I telling you about this?  Because the scheme could have resulted in tens of thousands of dollars in losses to our company.  We hope you will avoid being the victim or your company or your assistant.  Encourage communication, share schemes, put procedures in place to prevent these schemes, make your technology and IT consultants aware of any emails that make it through your spam filter.

Surprises may be great around birthdays but they are no way to start the New Year when they involve Phishing!

Women talking outside

Real Estate Growth In Georgia

Gratitude… it’s an everyday attitude…

By Rich Shafritz & Doug Dean

We all just finished celebrating Thanksgiving; shortly, many will be celebrating Christmas, Hanukah, or Kwanzaa, and, before we know it, the New Year is around the corner.   These, like many holidays, are times of reflection, celebration, appreciation, and it’s when most of us really try to express gratitude.  But gratitude doesn’t have to be around the holidays.  It’s something to express everyday both personally and professionally.

Like you, we are so grateful for our friends, family, staff, the many “friends of the firm” and every meaningful relationship in our lives, including each other.

But while it’s easy to feel grateful for the people in our lives, it’s important to find gratitude in everything.  We thought we would start by finding gratitude in the future!  We are so optimistic for the future and we thought we would share some exciting news to get everyone “in real estate” bullish about the future and grateful for tomorrow.

  1. Millennials are bullish about homeownership and unfazed by rising rates! According to an article in National Mortgage Press, Millennial statistics for home purchases are up year over year, and, ‘ “Despite rising interest rates, Millennials are still looking to buy homes,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae.’  Source: National Mortgage News  article 11/14/18 by Phil Hall – Millennials Nonplussed by Rising Interest Rates

Let’s be grateful that our next generation are bullish on homeownership!  With those who were born from 1981-1996 excited about owning homes, starter homes will sell and when starter homes sell, the move ups will sell and the market will continue to grow!  Also, their excitement means the dream of homeownership is alive and well and will “drip down to the post-millennial generation.

  1. Let’s be grateful for the future in Georgia and major metro Atlanta area. Several statistics suggest we all have much to be optimistic and thankful for including:
  • Georgia’s population growth at greater than 1% make our state one of the fastest growing in the country in recent history and into the future! Source: Growth in population, much of which is in Metro Atlanta, where many of us are located, means more people purchasing homes, more financing opportunities, closing etc., compared to the rest of the country!  We are definitely grateful that Georgia is expanding and not contracting as a state in population!
  • Unemployment is down from a very low of 4.5% October 2017 to 3.6% in Georgia to 10/18.Source: Georgia Department of Labor – When unemployment is low, more people are financially able to buy homes and qualify for mortgages.  When unemployment is historically low, employers are forced to pay more for qualified employees and that means they can afford more often in spite of rising rates.
  • Georgia boasts 17 Fortune 500 company headquarters as of 2018, making it tied for 11thin the US (Fortune Magazine). Atlanta has been described as “the Silicon Valley of the South and is recognized as #15 out of top 25 cities for small business and a top 20 city for start-ups!  And CNBC ranked Georgia 7thfor business!  Additionally, GA Governor Deal’s office announced that Georgia has been named the top state for business for the fifth straight year by Area Development (a leading site selection and planning publication).  If you want to grow, be where the growth, business and innovation are.  Could we be any more excited?! Sources:
  • Not to mention I am grateful that according to the above site, despite the growth and success of our state and Metro area, we are still a good buy coming in as the 9thmost affordable state in the country.
  1. Finally, for this article… Here’s something (counterintuitive) we are grateful for … rising rates!Rising rates mean many things….
  • Fence sitters might be persuaded to purchase (or sell).
  • It will be time for both lenders and agents to get back to “selling” the alternative programs which for many will be just what they need. Examples include 5/1, 7/1 and 10/1 ARM programs which will give homebuyers some stability while providing a lower rate to homebuyers and borrowers. Not to mention, Non-QM will broaden a market for both.
  • What goes up must go down. Loan officers (which one of us once was … Rich from 1991 to 2001, including stints in residential and commercial loans) like “refi booms” which don’t occur when rates are flat.  With historically low rates the likelihood of them going down further was remote.  So when we have an increase in rates, the cycle of a slowed economy will lead to reduced rates and the next boom!

In summary, be grateful for the little things, the big things, the people in your life and the future… one we hope to share with you often and soon!

The Lead Ladder book cover

The Lead Ladder

Several years ago while at the Atlanta Board of Realtors, curiosity got the best of me and I ducked into their book store to see what they offered.  This little book with a subtitle – Painlessly  Turning Strangers into Clients One Step at a Time was not only relevant to real estate agents, but certainly loan officers, closing attorneys and frankly anyone in business.

My personal opinion is that most real estate agents, lenders and closing attorneys that fail in business do so not because they are incompetent technically but because they do not have enough business (leads, prospects, clients, etc.) to remain profitable.

The Lead Ladder written (in 2005) prior to at least the take-off of social media and websites/companies like Zillow, etc. is as relevant now as it was then.  If you are struggling because you can’t build enough business to remain in it or if you are doing well but want to do better this book is for you!  I always tell staff and attorneys that we need business to remain profitable so we can practice ( note law firms are referred to often as a practice) and get better.  If you wait to have the perfect system to serve your relationships you will fail. Nothing is as important to your success as staying in business which you and I can’t do without clients.

Marcus Schaller, sums up his book this way on page  ix of the foreword, “The Lead Ladder is about earning trust.” Trust takes strangers to prospects and prospects to clients and clients to relationships which become enduring (that’s my philosophy but in line with Marcus).   The book itself is less than 130 pages and can be read and re-read (which I highly recommend) in less than 1 hour or so. It’s broken into 8 small chapters and a nice appendix providing the questions necessary to create and customize your own marketing plan.

One of the things I really like about this book is it starts with the premise that while referrals are fantastic, a real business is about lead generation and to foster leads requires more than just relying on “mining your database” for referrals.   Marcus through his story discusses the woes of Ted, a sales rep who had been successful but was now failing because,

“He could no longer rely on referrals for new business.  He would have to go out and actively seek new clients.”

How many reading this feel or have felt like Ted… my guess we all have been there.

The book can be summarized as follows – identify the problem, solve it, set goals, market to those willing to pay to solve the problem, create the offer that “grabs them,” find a broad audience (i.e. advertise) to broadcast the offer, get that database going, follow-up (the right way and effectively) and the natural results (i.e. success) of the system.  All that in big font, small pages, large borders and few pages.

So it’s easy to read and retailed (when I purchased it) for $19.95 and I’ll bet you can get it cheaper on line.  What do you have to lose?  … and if you follow Ted’s journey, implement the ideas shared by Marcus you will see your business grow… I guarantee it (remember Sy Sims of the Sims Clothier commercials?).

Please read this little gem, let me know what you think and while you’re growing your business help us grow ours too!

Jack-o-lantern with dark background

Trick or Treat! Tricks to a Smooth Closing, and our Halloween Treat

By Doug Dean

Trick or Treat!  It’s that time of year!  In our Trick or Treat edition, we will give you Tricks to ensure smooth closings, and our Halloween Treat for you.

One way we like to assist real estate agents that we work with is by providing CE (continuing education) classes.  I’m currently teaching about 4 CE Classes each month (check our website calendar for a list of CE classes).  I really enjoy teaching CE classes, meeting the students and providing not only the necessary CE credits, but also helpful information.

One of our popular classes is “From Contract to Closing: What to Expect From The Closing Process”.   It’s based on our attorney’s collective knowledge from closing tens of thousands of transactions over 15+ years.  I’ve summarized a few of the key points below.  While many might seem simple and basic, it is often the overlooked basic items that cause problems, not the obscure areas of the law.  Understanding the Tricks below will help ensure your closings go smoothly and on-time!

Trick #1: “The 411” When we begin processing a file, we reach out to the buyers and sellers, to gather important information needed for closing.  A contract that has Buyer and Seller names spelled properly, with phone numbers and email addresses, allows us to get to work much more quickly, without having to go back to the agents to get contact information for the parties.

Trick #2: “The Information Sheets” Most all firms, ours included, have Buyer and Seller Information Sheets, which are used to collect information we need to process the file for closing.  Let your parties know to anticipate receiving an information sheet, and ask them to complete it and return it promptly.  Delays in receiving this critical information slows down our ability to order information we need for closing, like payoffs, HOA information, insurance, etc.

Trick #3: “Beware the HOA/COA Closing Letter!”  If the property is in a community with an HOA or COA (Home Owners Association or Condo Owners Association), we will need an HOA/COA Closing Letter from the Association.  This official document gives us information about the current account, confirming if it is paid current, and fees we might need to collect at closing, such as an Initiation Fee, Transfer Fee, and the like.

There is typically a fee to obtain this Closing Letter, and they are often expensive (anywhere from $10 to $1000; if you can believe that!).  We look to the purchase/sales contract for the “Community Association Disclosure” to see which party is obligated to pay for the Closing Letter.  We make arrangements with the Association to order the Closing Letter, and contact the responsible party to pay for it.  If a party does not timely pay for the Letter, it can either delay the closing, or the cost will go up, because now the HOA will want a “Rush Fee” of perhaps $200 or more.

Make sure your parties are aware that they may be responsible for paying for an HOA/COA Closing Letter, and that doing so timely will keep the closing on schedule and avoid paying rush fees for the Closing Letter.

Trick #4: “The Same Page” Contracts are often revised, to address inspection findings, changes in sales price or closing costs, etc.  Be sure that the Lender and Closing Attorney are kept in the loop on contract amendments.  At one closing, the parties asked for the $500 deck repair credit from the Seller to the Buyer.  We advised that we had not seen that, and could they provide more information?  They advised it was in Amendment 4 of the Contract.  Unfortunately, both the Lender and our firm had only received through Amendment 2 of the contract.  The loan had to go back through underwriting with the Lender to address Amendments 3 & 4, resulting in a lengthy delay at closing.

Trick #5: “The Review” Ask for a preliminary copy of the Closing Statement at least a day before closing.  Review it carefully, looking for such items as: Earnest money (is it shown on the closing statement; in the correct amount; held by the proper party)?  Home Warranty (issued by the proper company?; proper amount?; paid for by the proper party?) the Sales Commission (broker names listed properly? payment amounts correct?).  You get the idea.  With a little review in advance, any inadvertent errors can be quickly fixed before closing.

Trick #6: “Show Me the Money!” Be sure that your parties know how much to bring to closing, and in what form.  Make sure they wire funds in excess of $5,000, and that you have advised them about how to avoid wire fraud.  For amounts less than $5,000, check with your closing attorney to see what amounts may be paid with a personal check, and what amounts require a cashier’s check.

Enough Tricks!  Now, for the Treat!

Halloween Spirit Treat   Do you have photos of your Halloween Spirit?  We’d love to see them!  Your favorite Halloween costumes for you, your children, or pets?  Your Halloween party?  Your house, decorated for Halloween?  Post your Halloween Spirit photos to Facebook or Instagram, and tag Shafritz & Dean, LLC.  We will pick our favorite Halloween spirit photos, and give out a few cash prizes for 1ST, 2ND, and 3RD place!

Trick or Treat!  Have fun, and be safe!

Po Boy sandwich with fries and iced tea

Our Favorite Spot In Douglasville

This summer we moved away from Douglasville to Canton GA.  I grew up in Douglasville, we built our first home there and stayed for 25 years.  One of the things we will miss most about Douglasville is Gumbeaux’s Cajun Café.  A local resident opened it many years ago using many of his family’s recipes.  The food is amazing, very authentic, and the atmosphere is friendly and casual.  I still believe they have the very best fried oyster Po Boy.  A tradition that Doug and I spent many a date night enjoying, is sitting upstairs at the voodoo lounge and drinking a train shot when a train rolled through.  If you enjoy Cajun food, it is worth the trip to Douglasville, I promise.  We still maintain an office in Douglasville, so we can still swing by occasionally for a draft beer and an order of Cajun Popcorn Shrimp and Gator.


Aerial view of autumn forest

Fall is About Change

As we enter Fall, a big theme is change.  Change is happening in nature, but also throughout our industry.  For our realtor friends, we see changes with how real estate is sold, changes with how brokerages operate, business is developed, etc.  The same is true for those in the mortgage industry.  Mortgage professionals, like realtors, are seeing changes in the way they market, deliver services etc. Mortgage professionals also deal with Federal laws which regulate much of their industry (real estate agents, while also affected by Federal laws, are governed by State law). Changes adopted to TRID in 2018 go into effect October 1st.  Check in with your favorite mortgage professional to find out what’s new on a regulatory basis. Like the real estate and mortgage professionals there are changes going on in the closing industry.

Change is happening much faster in 2018 largely because of technology.  We are all on technology overload, and we have to sift through what is needed and can help us, and what is just “noise.”

Sometimes we change to solve a problem and create a new one. Years ago, funds in excess of $5,000 were not required to be delivered by wire. The “Great Recession” changed that. Georgia decided wires were the safer alternative.

Today we know wires are risky business.  With wires, the industry attracted cybercriminals intent on redirecting funds.  In past articles we have addressed this industry risk and how to mitigate.  If you have questions, ask your favorite S&D attorney to share our tips to protect yourself.

However, some innovations and changes are for the best.  Ten years ago, we did monthly bank account reconciliations manually.  Some firms did them internally, and some firms through outside auditors. Issues likely were not be caught for 30 days (if the auditor or staff was paying attention). Today, most firms, including ours use automated daily 3 way reconciliations to ensure the accuracy of their accounts.

Also, 10 years ago, fraudulent checks could be cashed at a branch and became major headaches for firms. Today our firm uses a bank product called Positive Pay to block fraudulent checks; only checks we pre-authorize to the bank (by a daily data upload) will be paid. Finally, 10 years ago, wires for payoffs and proceeds were much rarer and had to be called in.  Today, we initiate wires from our computer on-line at time of closing.   If the Seller doesn’t receive their funds within an hour after closing, we might get a call, wondering what is taking so long.

Technology leads to “faster”, and creates expectations to do, respond, address, download, upload etc. faster. When people are moving fast on computers they make potentially big mistakes.  So when dealing with those critical processes, slow down, and have a process to avoid costly mistakes.

Here are a couple of big changes in the not too distant future of closings –

E-closings.  Years ago our firm worked with one pioneer lender to do closings partially on-line. There is  major movement in this direction.   Our firm is exploring this and preparing for the future.  Some states will transition to this new technology faster.  Remember: real estate (unlike mortgages) is governed by state law.  But before too long like everything else expect to see some “closings in the cloud.”

Blockchain & Cryptocurrency in real estate transactions. Though likely not as imminent as e-closings, the buzz right now is to expect to see this relatively soon. At least a few people have asked if we accept bitcoins.  It seems cryptocurrency is presently for speculators and criminals (since they in theory allow for anonymity) but real applications for both cryptocurrency and blockchain are expected.

One thing that will never change is our commitment to you and your clients.  Our pledge to care, to improve and to serve, we hope will allow us to be successful regardless of changes within our industry!

Silhouette of a woman on a dock at sunset

Financial Freedom

Speaking of change… I often think about that quote –

“Insanity is doing the same thing over and over and expecting a different result.”

We want change for the better; but do we change?

Like everyone reading this review, I am not getting any younger, and like many of you, I survived the “Great Recession.”  Survive is the honest word and that’s frankly something any of us should be proud to tell our children or a stranger.  But, time marches on and I am looking to achieve financial freedom.

Zig Ziglar and Jim Rohn argued for decades about motivation and information – Zig suggested motivation was most important and Jim is credited with the famous quote –

“If you have an idiot and you motivate him, now you have a motivated idiot.”

In a way, both are correct, you need the motivation to change but also the information, knowledge and growth to make it meaningful and lasting.

David Bach’s book delivers enough knowledge and motivation to make a lasting difference if you want to improve your financial future.  You don’t have to be an economist or stock expert to implement his best ideas and improve your financial upside.  It’s easy to read, easy to learn and easy to apply.

For me, several of the chapters had an impact, but two chapters really stood out: Chapter 3 – Find Your Double Latte Factor and Chapter 8 – Pay yourself first…faster.  In both cases, I have heard the advice from others, but he helped crystalize the importance of each and better implement for results.  In the case of the Double Latte it was about focusing on converting wasteful spending into successful saving.  We all have joked about how much we spend eating out or drinking the fancy coffees. and how wasteful that is, but it’s not just about spending less.  David Bach argues that you should set a goal and invest a specific amount.  Don’t just save in one area and spend in another, find your double latte, figure out what you can save monthly and invest this amount immediately and over time consistently.

Paying yourself first…emphasizes aggressively paying yourself before you even pay your taxes. This doesn’t mean splurging on frivolous things because you deserve it, but rather investing in tax deferred plans such as 401ks and IRAs to the max before you even pay taxes.  Since these are pre-tax dollars, he shows how you can invest heavily, reduce your taxes and limit the impact on your “take home pay.”

These are just two of the many good ideas which he explains in easy to understand and apply to your financial life.  But I also liked his chapters on living a rich life and being more charitable. Making money to just collect is not the way to go – as they say, “you can’t take it with you,” right?

Each idea included the growth over time with compound interest based on a 10% rate of return.  I am not sure in this generation of low rates and volatility in the markets that 10% is truly realistic but … all the more reason to find creative ways to earn more, waste less and save your way to financial freedom.

Finally, I was in a closing with two partners this week, and one asked me the last book I read, I started talking about this book. The friend who asked the question, said

“Wow I need to read it… it sounds amazing.”

Meanwhile his friend, a financial planner, said, “It is a great book.  I have it and you can borrow my copy.”

Unless you are there already, pick up this book, read, apply and thank me in 30 years! Here’s to your financial freedom!