Industrial Process

Archive for August, 2009

FHA Loans Lower Fees And Raise Acceptance

FHA mortgage insurance programs assist low and moderate income families become homeowners by lowering some of the costs of their mortgage loans. FHA loans encourage mortgage companies to make loans to otherwise creditworthy borrowers and projects that might not be able to meet conventional underwriting requirements by protecting the mortgage company against loan default on mortgages for properties that meet certain minimum requirements.

Todays FHA program is the adaptation of the very same program which has helped save homeowners from default since the 1930s. Today One to Four Family Mortgage Insurance is still an important tool allowed by the federal government to expand home ownership opportunities for first time homebuyers and other borrowers who would not otherwise qualify for conventional loans on affordable terms.

Several amendments have been made to the FHS in the nearly eighty years it has been a part of United States federal policy. Most notable to these changes is evident in the 203(b) clause added in the 1980s which allows numerous advantages to the first time and disadvantaged home buyer.

In contrast to conventional mortgage products which frequently require down payments of 10 or more of the purchase price of the home single family mortgages insured by FHA under Section 203(b) make it possible to reduce down payments to as little as 3 . This is because FHA insurance allows borrowers to finance approximately 97 percent of the value of their home purchase through their mortgage in some cases.

With most conventional loans the borrower must pay at the time of purchase closing costs (the many fees and charges associated with buying a home) equivalent to 23 percent of the price of the home. This program allows the borrower to finance many of these charges thus reducing the up front cost of buying a home. FHA mortgage insurance is not free: borrowers pay an up front insurance premium (which may be financed) at the time of purchase as well as monthly premiums that are not financed but instead are added to the regular mortgage payment.

Finally FHA rules impose limits on some of the fees that mortgage companies may charge in making a loan. For example the loan origination fee charged by the mortgage company for the administrative cost of processing the loan may not exceed one percent of the amount of the mortgage.

Along with a renovation of the FHA regulations during the 1980s to accommodate for an everevolving real estate market the federal government adapted whats known as a streamline refinancing program. This refers only to the amount of documentation and underwriting that needs to be performed by the mortgage company and does not mean that there are no costs involved in the transaction.

There are a few basic requirements to qualify for the streamline option. The mortgage must already be insured by FHA the mortgage to be renewed must be current and paid on time to date the refinance is to result in a lowering of the borrowers monthly principal and interest payments and no cash may be taken out on mortgages refinanced using the streamline refinance process.

Companies may offer streamline refinances in several ways. Some offer no cost refinances (actually no out of pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium the company pays any closing costs that are incurred on the transaction.

Also companies may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property as determined by an appraisal. Streamline refinances can also be done without appraisals but the new loan amount cannot exceed what is currently owed i.e. closing costs may not be added to the new mortgage with those costs either paid in cash or through the premium rate as described above. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal and thus closing costs may not be included in the new mortgage amount.

Once you do or if you have ever fully paid off a home backed by FHA you may be owed back compensation from the government. About 1 in 10 FHA borrowers leave money in their escrow accounts when they pay off their loans. The average refund for each borrower is about 700.

In addition to the more standard mortgages available in this program the federal government has also allowed for more creative forms of home owners who could qualify at least in part from FHA funding. For example FHAs energy efficient mortgage program provides mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy efficient improvements into the mortgage. The mortgage loan is funded by a lending institution such as a mortgage company bank savings and loan association and the mortgage is insured by HUD.

One of the most enjoyed benefits of the FHA though is that the down payment for an FHA mortgage can be 100 gift funds. Verification of the source of gift money is not required to benefit from this particular aspect of the legislation. However it is necessary that the gift funds be deposited in the borrower’s bank or savings account or in an escrow account prior to underwriting approval. Gift donors are restricted primarily to a relative of the borrower. They can also be certain organizations such as a labor union or charitable organization. Contact your local branch for complete information. Additionally proof of initial deposit is required.

The Federal Housing Administration is one of the most successful government programs in American history and over the decades during which the program has been in existence thousands upon thousands of home owners have been able to procure the home of their dreams when it may not have been possible otherwise.

About the writer:

Gary Carraghan is a successful author and regular contributor to www.supermortgages.com who provides moneysaving tips on mortgages. More of his relevant work may be found at http://supermortgages.com/FirstTimeHomeBuyer and http://supermortgages.com/ResidentialMortgageLoans where he discusses several viable options for future homeowners including first time home buyers.

Note to webmasters: Above hyperlinks must be kept intact when this article is published in another website.

Customer Service And Call Center Outsourcing Whats The Buzz?

The buzz is all about customer service and call center outsourcing also known as BPO (Business Process Outsourcing). According to Gartner the outsourcing market in Europe has grown with over 6 BPO with 10. The market for offshore outsourcing (to low wage countries) is growing with a whopping 40 this year! However the subject of outsourcing is not without controversy. So what’s it all about?

In the 90s growth was the motto for organizations. Eat or be eaten. Through the continual increase of stock value this could be easily financed. As a result businesses were acquiring activities that are on the surface anyway only loosely related to the original business goals and to each other. The demise of world economy and the burst of the Internet bubble changed all that.

In these days of tight budgets and heightened attention on ROI (Return on Investment) and TCO (Total Cost of Ownership) companies are taking a good look at what they are in business for and what they are best in. This focus on the core business has lead to the selling of complete branches of companies. Now businesses go even further by taking a look inward in search of generic processes to outsource. Finance Human Resource and Customer Service are now the focus of outsourcing which was more or less the playground for IT support in recent years.

Outsourcing the utilization of resources outside an organization is not a new thing. Barter trading the oldest form of trading was in fact just that. One person traded a skill (or a product made through that skill) to get access to another person’s abilities. In the old days it made perfect sense to let an activity be done by the person most skilled. And old becomes new as they say.

Benefits of Call Center Outsourcing

It makes sense that a company who’s core business it is to organize and execute a call center is more likely to do a better job at it (although that’s not a given)! It’s like hiring someone to put a floorboard in your house. You may be able to do a decent job yourself but they are a lot quicker at it! So efficiency is a clear benefit.

Being in the call center business call center service providers are more likely to be able to hire skilled and experienced personnel. And since a service provider (usually) services more than one company there is more support personnel to go around. This helps continuity as your service isn’t jeopardized if an employee decides to leave. Also since the customer service reps are probably working for more than just your company you can benefit of lessons learned from other contracts.

Ah didn’t I mention the money? The 1 reason for outsourcing is of course to lower costs. Outsourcing companies can have lower rates because of the greater efficiency but also through economies of scale which actually means that fewer personnel is needed for servicing the combined contracts than when each company would organize it themselves. Plus they can easier mix more junior and senior staff which is a near to impossible feat if you have just two customer service reps!

The money question is getting even more interesting if we take the possibility of off shoring into account. Outsourcing to low wage countries like India is bringing extra financial benefits into the equation (but also some pitfalls as you’ll see later!). The different work moral is also often viewed as a benefit. For example in India workers are very disciplined and organizing a 24/7 service is easier than in Western countries.

Outsourcing Pitfalls

Outsourcing projects often fail on unclear expectations at both the customer and service provider. When considering outsourcing make sure you yourself have a clear image of what the level of service is that you are expecting. Be as specific as you possibly can. Pick out the elements that are most important to you and think about how this would best be managed. Measurable performance indicators are better.

Remember that outsourcing is a game of trust as well as money. If when negotiating service levels you feel that you have to stamp out every eventuality in a contract I’d advice against outsourcing. I would however put an optout into the contract in case trust is lost between the outsourcing partners. Believe me no partner would want to get stuck in a contract between two distrusting partners. For the rest focus on measurable Key Performance Indicators (KPI’s) and a clear payment scheme to protect your bottom line.

Anxiety for outsourcing is often fed through the loss of operational control. Remember you no longer handpick customer service personnel and you are much more limited in directing the service. Also you may have to fit in the standard approach of the service provider. But the tradeoff for the loss of operational control is more managerial control. But this tradeoff only happens if you negotiate your service levels properly as mentioned earlier.

And then off shoring… With the advent of off shoring a lot of vendors are now operating the market. But if you’re selecting a partner dont rely on the reputation of the vendor alone but do make sure that you deal with the people who will be managing your service. Take special attention to the level of experience of these people.

The cultural differences can be enormous especially when outsourcing to India. Don’t make assumptions but be very specific in your business needs. And India although the buzz is all about it is not the only low wage country in the world! You could consider outsourcing to low wage countries that are not so far away for instance Spain or Mexico.

Another element to take into account is this: if your business is adding only minimal value or profit to the service provider you risk receiving substandard service levels. If this is the case it’s probably safer to steer clear of off shoring.

Conclusion

Looking at both the benefits and pitfalls of outsourcing call centers and customer service it is clear that there are clear opportunities for reducing the level of costs for organizations. However do not downplay the risks. If an organization is inexperienced in managing customer service the risks for failing are very real as tight management and KPI evaluation is very important. But in the end it’s all a matter of trust. Ask yourself: do I trust a partner this partner with a piece of my business?

About the writer:

Erwin Steneker is a senior support consultant with over 12 years of experience in both sales and IT support. Check out www.customerservicepoint.com for articles on quality Customer Service CRM help desk software tests and more.

Sales Therapy 101: Breaking Your Fear Of Cold Calling

Almost every day visitors to my Unlock The Game website click on my live instantmessenger chat button which invites them to “Ask Ari a selling question.”

And do you know what their most common question is?

Yes you guessed it: “Is there any way I can break through or overcome my fear of cold calling?”

Most of us have at least some resistance to cold calling and some people I talk with have such a paralyzing visceral and emotional fear of cold calling that they can’t even consider doing it.

In some ways the fear of cold calling is practically an epidemic but not the kind of epidemic that gets publicized on TV or in newspapers. It’s a silent and personal one a psychological struggle that happens in our own hearts and minds.

The fear of cold calling is a painful daily struggle for many entrepreneurs and salespeople who have been trained in traditional selling techniques.

Traditional sales trainers answer questions about cold calling this way:

“All you have to do is make more phone calls.”

“All you have to do is think more positive thoughts.”

“Just learn to accept rejection as a normal part of selling.”

In other words “It’s your fault that you aren’t succeeding in sales.”

This is like telling someone who’s terrified of jumping off a diving board “Don’t be a wimp! Just jump!”

In my experience very few people are able to overcome their fears that way because the underlying message is that if you force yourself to do something uncomfortable “just doing it” will magically solve the problem.

But this is a response that shows no understanding at all of the psychological barriers that underlie the fear of cold calling. So how do you overcome your fear of cold calling?

In my opinion the solution actually is simple and is based on understanding three simple concepts:

1. It’s Not Your Fault

We can’t help thinking there’s something wrong with us if other people keep telling us that something shouldn’t be a problem but our own inner feelings tell us that we aren’t comfortable doing it.

There’s a sort of “old boys’ club” salesconditioning mentality prevalent in Englishspeaking countries including the US Canada the UK Australia and New Zealand that says “I had to suffer to succeed in sales success so you need to too!”

This thinking comes from traditional sales programs that continue to be the accepted approach to selling.

What you need to understand though is that you may fear cold calling because you have probably been exposed only to traditional selling approaches which triggers rejection.

These approaches teach us to make cold calls this way: introduce yourself explain what you do suggest a benefit to the potential client…and then close your eyes and pray that they won’t reply with “Sorry not interested” or “Sorry I’m busy.”

If you’re still using this traditional approach you probably hear responses like these the moment you stop talking.

They’re rejections and what they do us make you feel rejected and that’s reason enough to make you dislike fear and avoid cold calling.

How can cold calling be a positive experience if rejection is the most common response you get?

2. Are Your SelfPerceptions Passive or Aggressive?

Whenever I chat with people about the fear of cold calling they almost always tell me that they’re afraid to make cold calls because they don’t want to be perceived as “aggressive.”

This is another part of the internal battle they beat themselves up for being too passive and lacking the confidence to make the next call but they don’t want to call for fear of being seen as aggressive.

Here’s the good news: there is a middle ground between “aggressive” and passive.”

It’s a place where you can be who you are while still being extremely effective with cold calling without ever experiencing rejection again.

Unlock The Game shows you how you can be incredibly effective in cold calling without triggering rejection from potential clients. Imagine the possibilities (and the income potential).

3. Learn to Let Your Language Match Your Thinking

If you can center yourself into a place where you can let go of feeling that you have to go on using traditional cold calling “scripts” and behaviors you’ll find yourself spontaneously using language that you would use in a natural conversation.

Using natural words and phrases speaking exactly the way you would with someone you know can transform cold calling into a refreshing and productive experience.

And as you let go of the oldschool cold calling model in which your product or service is your only way of generating a phone conversation with a prospect you’ll make the most crucial transition of all: you’ll begin thinking of approaching potential prospects not from your perspective but from theirs.

What do I mean by that?

Imagine what it would be like if you could hear your prospect’s thoughts about the problems they are having and that your solution can solve.

Even more importantly suppose you could also make note of the words and phrases they’re using as they think about their problems and that you could take that language and embed it in your cold calling approach.

“Yes but how would I do that?” you might ask.

It’s simple. Just ask your current clients what three core problems your product or service has solved for them.

When you change your thinking you can’t help changing the language that you use which lets you connect in a whole new positive way with the other person you are calling.

If you can let go of your oldschool belief system and open up to the possibility that there is a more natural comfortable way to cold call one that doesn’t trigger rejection you’ll be surprised by how easily you’ll break through and overcome your fear of cold calling.

About the writer:

With a Masters Degree in Instructional Design and over a decade of experience creating breakthrough sales strategies for global companies such as UPS and QUALCOMM Ari Galper discovered the missing link that people who sell have been seeking for years.

His profound discovery of shifting one’s mindset to a place of complete integrity based on new words and phrases grounded in sincerity has earned him distinction as the world’s leading authority on how to build trust in the world of selling.

Leading companies such as Gateway Clear Channel Communications Brother International and Fidelity National Mortgage have called on Ari to keep them on the leading edge of sales performance. Visit http://www.unlockthegame.com to get his free sales training lessons.