Mortgage technology and beyond: The quest for the perfect database

Mortgage technology and beyond: The quest for the perfect database

January 9, 2005

Selling mortgages is not rocket science: If it isn’t the price ...Dave Hershmanrate shoppers, competition, price inquiries
This season, the phone will be ringing at lender offices across
the land. No matter how the phone call was generatedthrough direct
mail, the phone book, a referral or telemarketing responsethe
conversation will begin something like, "What is your rate on a ...
Meanwhile, loan officers across the country will be attending
sales seminars. These trainers (some who have originated mortgages,
some who have not) will emphatically teach that price does not
matter. The question remains: If price does not matter, why does
every conversation begin with the price question?
Let's get one thing straight: Price does matter. Relationships
matter as well, but price is definitely one heck of a factor. One
of the reasons for the whole B/C movement is the fact that many
originators are ducking out of price competition into an area where
price is not as important as a sense of urgency. Unfortunately, as
B/C loans become more standardized, they too are becoming subject
to price competitionalbeit not as sharp as conforming
Does this mean that every originator must have the lowest rate
on everything in order to sell? Obviously not, because there are
hundreds of loan programs, loan sources and mortgage brokers. No
matter how low you quote, someone is likely to quote something
lower. It does mean that you must be prepared to answer the price
question. If you don't have an appropriate answer to the question,
you can generate all of the leads in the world but you will still
starve at the end of the month.
So, what is the appropriate answer? There is no appropriate
answer because you have no idea at this juncture what the prospect
needs. You must first uncover these needs before you can move any
further. You will do this by asking the prospect a series of
questions. We do not have enough time in this column to cover the
questions that might follow a price inquiry (if you are interested
in delving into the subject more fully, e-mail me at and we will provide you a complimentary copy
of questions to ask rate shoppers from "My Complete Mortgage
Marketing Kit.")
While there is not enough time to cover the thousands of
questions that are possible, we can investigate one important need
that all of your prospects have: the need to deal with someone they
have confidence in. This is why personal referrals are so much
easier to sell. Personal referrals start with some measure of
confidence, and you can build upon this confidence from this
Typically, when the prospect begins with the price question, we
do nothing to instill confidence. As a matter of fact, a poor
telephone response will do exactly the opposite. It is said that a
prospect decides to do business with us based upon whether they
like us, and they make this decision within seconds or minutes
after the conversation starts. How much confidence is instilled
when we reply, "Uhhhh, my rates are not yet in today, and uhhhh,
can I call you back later when I uhhhh, have some rates?"
What should we say? First of all, the prospect doesn't care what
your rates areeven though price is very important. This doesn't
make sense until you try to remember what the rate is on your car
loan or car lease. How many of you reading this article know your
rate on your car loan or lease? How many of you know your payment?
Of course, we are much more likely to know the payment. Ninety
percent of your customers do not remember the rate on their
mortgage 30 days after they close. To find out, they would have to
look in their closing papers, which they are likely to have lost
Theoretically, they should be asking what your payment is on a
mortgage, but this sounds ludicrous on the phone: "What is your
payment on a mortgage?" However, it is not ludicrous to ask them
what kind of payment they are looking for and what they can afford.
Are they looking for the lowest possible payment? Do they want a
payment that will not change? Are they interested in a payment that
will help build up equity?
Of course, it is not wise to start blurting out questions in
response to their price inquiry. We must first set the stage by
building the basis of a relationship and gaining their interest.
So, start with a few basic questions such as how they were referred
to you. Find out how strong the referral is. Without rapport, it is
unlikely that they will dig deep and start to realize their true
motivation for picking up the phone and calling.
The last thing you want to do is sell a solution before you have
uncovered this motivation. Too many times, we stand ready to sell
our best and hottest program before we know whether it will help
our prospects fulfill their long-term goals. The payment questions
represent only one aspect of this investigation. Asking the right
questions will help you discover many other avenues that are just
as important.
Dave Hershman is a leading author and top speaker for the
mortgage industry with six books, including two best sellers for
the Mortgage Bankers Association of America. His mortgage school is
the only comprehensive advanced curriculum in the industry. For a
schedule of classes, free marketing samples, speaking information
and articles by Dave, visit or
call (800) 581-5678.