Mortgage Grapevine

Ever heard of John Shibley of Lennex Financial?

Not sure of the correct spelling. This guy advertises on the radio. "We pay all the closing costs down to the last dime" and refers to the rest of us (Brokers and LO's) as "Preditory Lenders" for charging closing costs. "It's the biggest no brainer in the history of earth" is his tag line. Anyone else think this is funny?
by fundster March 27, 2007 12:00 AM


Great commercial. His phones ring off the hook. He has been running the ad for over a year now. You dont pay that kinda jack...if it aint workin.

He calls us "preditors" not "Preditory Lenders".



K


by kermitthefrog March 27, 2007 12:00 AM


He is in atlanta and being doing this for years.

Does a lota loans...


by dead eye March 27, 2007 12:00 AM


You must be in the Tampa area as well. The only thing I can think of is he is running up the rate on the back to cover the cost. But I still don´t see how he can make money, unless his loan sizes´ are large.
by subprimespecial March 27, 2007 12:00 AM


My mistake, "preditors". I need to refi, do you have number handy?
by fundster March 27, 2007 12:00 AM


been
by dead eye March 27, 2007 12:00 AM


Of course he jacks the rate up.... Larger loan amounts...

We do them at 6.5% Fixed 30 yr.. today´s rates
by dead eye March 27, 2007 12:00 AM


I´m in the NW. He must have a huge outfit!
by fundster March 27, 2007 12:00 AM


As I no longer have radio, I rarely hear any ads... but Lennox Financial can be heard on XM Radio´s news stations.

He sounds like the fellow on Orlando TV years ago who used to smash windshields with a baseball bat to demonstrate to the public his eagerness to "smash any other deal" on a new or used Mazda.

I think that guy also used to tell the public buying a used car from him was "the biggest no-brainer in the history of the world".
by Deep River March 27, 2007 12:00 AM


He´s originally from TX, in most states and my understanding is the loan sizes need to be a certain minimum. I guess my thinking is if this is the way the industry wants to go, let´s go. Sucks to be the lender though, as he says "we´ll refi you next time the rate goes down and keep doing it for you for free every time". I magine the churning cost for the lender. I would definately like to know more about the guy though.
by newgrc March 27, 2007 12:00 AM


I actually know Mr. Shibley. He is one of the reasons I got in this business. I am in Atlanta and he does about $180 million a month ( nationally) mostly in no-cost refinances. His business model is very simple. Raise the interest rate and pay all the closing costs from the YSP. I can tell you he makes a ton of money and has been for about 10 years. He does piss off a lot of people with his ads,but they definitely work. He is on every radio station including WSB 750 which is by far the most expensive radio advertising in Atlanta. If it ain´t broke don´t fix it.
by myer March 27, 2007 12:00 AM


does anyone know his min. loan amount?
by subprimespecial March 27, 2007 12:00 AM



by myer March 27, 2007 12:00 AM


Probably 100-125k
by myer March 27, 2007 12:00 AM


I would think it would have to be at least 200+ because even if he made 3 on the back that would only be 3-4k per deal and after he covers closing thre isn´t much meat left on the bone, but I guess if you are doing 180 mil per month there doesn´t have to be.
by subprimespecial March 27, 2007 12:00 AM


http://www.google.com/search?sourceid=navclient&aq=t&ie=UTF-8&rls=GGLG,GGLG:2005-26,GGLG:en&q=john+shibley+lenox+financial


Good and bad...


You cannot do it on 100 to 125 as you need to much YSP. Again we quote 6.5 no cost, min loan 150K avg loan 200K..

Commissions are low, but there is not a lot of work in this type of deal. You do your better grade and wiser borrower this way.

We don´t do a lot of these, but we understand the concept...

We price 30 yr from a buydown 5.25 up to no cost at 6.5%
by dead eye March 27, 2007 12:00 AM


Closing costs in Georgia on a $125,000 loan are around $2400-$2500. If he makes 3-3.5% YSP on the back there could be anywhere from $1300-$1900 left for the lo´s and the company. Volume-volume-volume
by myer March 27, 2007 12:00 AM


If your closing cost are only $2500, on a $125K loan, I need some new vendors! I mean it. Unless your loading up on YSP, you aren´t making any money.
by newgrc March 27, 2007 12:00 AM


Those are the closing costs if you are not charging any origination,discount or junk fees. If someone told you that you could do 1-2 hours worth of work on each loan and make $600-$1000 and you could do that 20-30 times a month what would you say? There´s your answer!
by myer March 27, 2007 12:00 AM


That´s got to be closing costs only, not pre-paids. I´m sure his LOs are well versed in explaining the difference.
by Rhayader March 27, 2007 12:00 AM


Prepaid interest and escrows are not considered closing costs.
by myer March 27, 2007 12:00 AM


And by closing costs around $2400-$2500, you don´t include escrows and prepaids correct?

If that´s the case, this is a doable deal for us too!
by Rayzer March 27, 2007 12:00 AM


Never include escrows and pre-paids in closing cost...
by dead eye March 27, 2007 12:00 AM


Here, we call it Bling Bang!

If the LTV is below 80% that is easy to do, just pay to waive escrows..


by dead eye March 27, 2007 12:00 AM


Here we call it Bling Bang quoted the radio ad perfectly. They pump their commercials on at least two sports radio stations down here all the time. Wesley Hoaglund is the West Coast version of John Shibley...
by Art Vandeleigh March 27, 2007 12:00 AM


Ha, I knew there was another commercial that was similar to Lennox. At the end of the "Wesley" version it sounds like Shibley´s voice that states "equal housing lender."
by fundster March 27, 2007 12:00 AM


Wow - interesting to see the amount of people that didn´t know the mechanics of a "no cost refi".

Just look at the amount of additional interest the Borrower will now pay over the years and it is just as much of a "no brainer" to sell your customer against it.

When I was an originating LO it was $250K minimum, 80% LTV max, assuming a 700 FICO, Full Doc (based on AU findings),R/T refi were our requirments to do "no cost". We made a deal with the Title company, Appraiser & couriers on Fees. Then we ran the credit through a Fannie lenders DU (we didn´t get charged for credit that way) On a $250K we averaged about $2200+- in costs to cover. On a 70/30 split, we quoted a rate with (1.75) rebate. On the smaller end ($250K) we averaged about $2000 to the house minus a $350 processing. So the LO split $1650 @ 70/30 = $1100+- per deal.

In 98 - 2000 refi days we were each closing about 10-15 deals per month of these refis. Some Borrowers would want the lower rates and not do the no cost, some would be Subprime or Alt-A and didn´t get the no cost option.

Rocket science it ain´t, but it sure is an art form to keep a Refi shopper on the hook.

I hate Retail .......


by Alt-F, let the carnage begin March 27, 2007 12:00 AM


Blah, Blah, Blah, just wanted to know of others thought this was funny! I think it is:)
by fundster March 27, 2007 12:00 AM


His ad is all over our morning radio down here in the Miami-Fort Lauderdale-West Palm Beach Market.

Check out the following sites:

Lenox Financial: “No cost” mortgages?
http://scambusters.wordpress.com/2007/03/08/lenox-financial-no-cost-mortgages/

“No Cost” Mortgage Advertisers Prey On Unsophisticated Borrowers
http://themortgageinsider.net/blog/no-cost-mortgage-advertisers-prey-on-unsophisticated-borrowers/

Even Certified Public Accountants Get Fooled By “No Cost” Mortgage Sellers!
http://themortgageinsider.net/blog/even-certified-public-accountants-get-fooled-by-no-cost-mortgage-sellers/


by Look Deeper March 27, 2007 12:00 AM


This stupid hillbilly who thinks anybody who purchased a house and then through no blame of their own, lost his or her job is an idiot, should be shot. He is the idiot. Maybe not everyone can be as smart or successful as him. If everyone was like him the world would be perfect. I hope his parents were as smart as him. He really knows how to make others feel like they are below him in the status category. It's a shame someone like Jon Shibley just doesn't get it. Someday he will offend the wrong person and the wrong time and then?
by tyvek2 June 22, 2010 2:12 PM


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