Posted by Katrina Arnaud on 3/6/07 3:33pm
Msg #178550

Kizzie - $75 docs

Kizze:

I certainly feel you're frustration, but the complexity is beyond the obvious. Before the market shifts again, you may be very happy to have a $50 signing.

Home loans have been boom and bust several times: I'm old enough to recall the 11.5% interest loans from the '70's, and people still bought real estate. This is something different. There were too many adjustable loans above the 80/20, credit below 650, and housing prices dropped. The loan-to-value isn't there to support a refi, borrowers can't support their adjusted payments, and we are seeing record forclosures. It is cheaper for the borrower to walk away from a home if the loan-to-value doesn't support the original appraised value - the key reason appraisal values are always under scrutiny - even a $1K variance from neighborhood comps. Sub-prime has always been in bed with their appraisers and could ask for a value to come in at the amount needed to justify the loan.

Investors in the sub-prime market, just like the notaries, are in business for the quarterly investor dividend reports - profit. When an investment stops producing top-dollar returns, investment dollars move elsewhere, and it will in this case too. No investors, no sub-prime loans. Remember, home loans are federally insured and we, the tax payer, are paying the price for defaulted loans.

Are you old enough to remember President Regan and the air traffic controllers' union busting? Wages continue to take a spiral down, consumer goods as well, because of competitive foreign market competition, and you're point is well taken, that if other notaries will continue to sign for $75., how can we justify or sustain higher signing fee?

I have to chuckle reading your to-do-list; they are the duties of a signing agent. Period. Who better to perform these duties? Possibly in the free enterprise system we should charge more, but this market won't allow that to happen.

You didn't state the obvious: your cost of doing business is much higher than you suspected (E&O insurance, notary supplies, commission, fingerprints, background check, bond, training, electricity, cell phone, training, equipment, DSL, dedicated fax lines, E-Fax...).

Realistically, if you are using a laser printer as required, your consumable cost-per page should be closer to $.02 per page. Paper, by the case is approximately $$4/ream $5/ream - legal; and gas and telephone calls are relative to your coverage area. Are you really covering a large service or rural area? Many hardworking people are working for $8/hour or less: how many hours to you put into each package signed? Our most expensive time is the time we are not signing, printing, faxing, shipping and making contacts.

My telephone isn't ringing either, so this is the way I looking at this: If I receive a telephone call for an assignment that pays more than the project cost, I am going to take it. If I have an opportunity to take a higher-paying assignment that conflicts with the lower paying assignment, I will prioritize the higher paying job.

Realistically, a large percentage of small businesses fail within the first year from lack of operating capital and some of us won't financially survive. Larger companies diversify and adapt to the market conditions; a little tough for a signing agent offering only one service.

The states are revenue generating and are cranking out notaries and signing agents like a cookie cutting plant. All of us what to make a good living, unfortunately we chose a highly competitive field and many of us are working in a super-saturated market.

Turn your hat around backwards and pray for an election year.

Good luck in your business.

Katrina

Reply by Susan Fischer on 3/6/07 3:57pm
Msg #178558

***** (5 Star) post, Katrina! n/m

Reply by ZeeCA on 3/6/07 4:14pm
Msg #178561

Re: Kizzie - $75 docs EXCELLENT POST! n/m

Reply by KizzeTNCA on 3/6/07 8:21pm
Msg #178650

Katrina I hear you

I hear you and everbody else and have been for quite some time. I've been reading these post for longer then I've been a member and I've been a notary and signing agent for going on 4 yrs now and I'm just saying I've been silent to long and wanted to say my part. Could have said it more put together. For the most part I just about understand every bodies point. I know it's hard. I know we can get more. I know every job is not going to be $10 for this and that. Or that we do have so many other cost, and that business is business and we have to survive. But my thing is being all business is that if the shoe was on the other foot these business people we deal with not accept these prices, and I've hear to many side remarks and I've also seen what they give the signing companies so why should we settle, why should we make excuses when the money is there.

Reply by NCLisa on 3/6/07 11:19pm
Msg #178691

The problem with the sub-prime market was not the appraisers, and sub-prime has not always been in bed with the appraisers. Appraisers are held to far higher standards than most other areas of the real estate industry. Sub-prime got into the business of no longer requiring PMI by doing 80-10-10's, 80-15-5's, and 80-20's so the borrower would not have to pay the PMI. By purchasing a home with 100% financing, which gives you 0% equity, you have no money to lose by walking away. The number of people that purchased homes in 2006 and never even made their first payment was higher than in all the previous years combined. The sub-prime lenders shot themselves in the foot by getting greedy and allowing 100% financing to too many people. It's a given, that if you need 100% financing to purchase a home, then you can't afford the home.

Home loans are not federally insured. The only loans that are government insured are FHA, VA and a few other government loan programs. The lender only makes back what they eventually sell or auction the home for minus the legal and other fees unless the loan had PMI. PMI guarantees lender gets paid the outstanding loan balance by the insurer if the borrower defaults on the loan.

Reply by AngelinaAZ on 3/7/07 2:28am
Msg #178705

Thank you Lisa.

I almost went bonkers when I read this post.

Reply by NCLisa on 3/7/07 7:48am
Msg #178715

You have it all wrong

The problem with the sub-prime market was not the appraisers, and sub-prime has not always been in bed with the appraisers. Appraisers are held to far higher standards than most other areas of the real estate industry. Sub-prime got into the business of no longer requiring PMI by doing 80-10-10's, 80-15-5's, and 80-20's so the borrower would not have to pay the PMI. By purchasing a home with 100% financing, which gives you 0% equity, you have no money to lose by walking away. The number of people that purchased homes in 2006 and never even made their first payment was higher than in all the previous years combined. The sub-prime lenders shot themselves in the foot by getting greedy and allowing 100% financing to too many people. It's a given, that if you need 100% financing to purchase a home, then you can't afford the home.

Home loans are not federally insured. The only loans that are government insured are FHA, VA and a few other government loan programs. The lender only makes back what they eventually sell or auction the home for minus the legal and other fees unless the loan had PMI. PMI guarantees lender gets paid the outstanding loan balance by the insurer if the borrower defaults on the loan.

Reply by Genkichan on 3/7/07 12:54pm
Msg #178808

Re: You have it all wrong

QUOTE: "It's a given, that if you need 100% financing to purchase a home, then you can't afford the home."

I have to seriously disagree with this statement. Many, many would-be buyers are low on actual cash to buy a home, but have the income to support the monthly payments. It's been nearly impossible for anyone to save for a 20% down payment, or even 10% for that matter, plus closing costs, for a very long time. My husband and I bought with an 80/20 loan scenario back in 2002. It was the only way we could afford to purchase. We had the income to make the payments, and enough for closing costs, but no money for any downpayments. There are lots of people in this situation.

Reply by NCLisa on 3/7/07 2:54pm
Msg #178847

Re: You have it all wrong

Was your loan sub-prime? If people have bad credit, and no down payment, should they be purchasing a home that is 100% financed? No, they should repair their credit, and save at least some sort of down payment.

Too many people are upgrading to homes they can't afford the monthly payments for, and they are buying them with 100% financing.