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HUD issues interim rule for ARM eligibility

Jun 22, 2005

Tracking stats: Performance numbers can add up to successWilliam Alvarobusiness tactics, keys to success, business advice Keeping up with stats In springtime, a broker's thoughts should turn to baseball. Not only are the days perfect for an afternoon at the ballpark, brokers can also learn a lot about their business from baseball. Most significantly, like America's pastime, mortgage brokering is a numbers game. Diehard baseball fanatics will be the first to say that the game is all about player statistics. Players' performances at bat, on the mound and in the field are tracked across their entire career, and they are evaluated against their own play in previous games and years, as well as against other players. Stats are the lifeblood of baseball, and they will also deliver a great return on investment (ROI) for professional brokers. Just as players, coaches and fans keep up with the numbers, high-performing brokers have learned the advantages of tracking their stats. Clearly, broker statistics have a different purpose and meaning than Derek Jeter's batting average; however, in the mortgage lending game, the numbers reveal valuable information that can drive brokers' businesses and provide a competitive marketing edge. Benefit from it Success-oriented brokers understand the benefit of adopting a long-term business mentality supported by a strategic game plan. They are not only concerned with current business opportunities; they also want to focus on the future. Gathering and leveraging performance data can play a pivotal role as brokers craft their business plans to reflect and adjust to seasonal trends or economic indicators. Plans that are built upon broker performance data map out proactive activities designed to grow business and adapt to fluctuating workflows. Numbers have several purposes with regard to borrowers and building business. After the plan is in place, knowing what to gather, where each piece fits and why it is important are key to leveraging the information. Tracking application or lending volumes by month and tapping borrower data can be the strategic differentiator that positions successful brokers above their peers, especially during times of slowing first mortgages and increasing interest rates. Brokers who monitor the life events affecting their customers' mortgages and financial circumstances, as well as periodic fluctuations in the market that have an impact on lending volume, will discern patterns. This year's patterns can serve as predictors for next year. Understanding borrower priorities and loan history will enable brokers to better serve their customers, transforming them into repeat business and a strong referral system. Identifying which loan types do best during certain seasons will give brokers an opportunity to develop marketing materials around these times. With this, brokers can proactively target potential business with strategic planning. Track now and grow your business Creating a database of electronic knowledge about borrowers and seasonal borrowing trends can build business, turn previous customers into new ones once again and attract prospects. Brokers need a system that works as a management tool for storing value information that can be the backbone of new business strategies. Selecting a data management and tracking system can be the most formidable barrier to brokers who want to keep performance stats. Since there are no rules on how to manage systems, brokers have the flexibility to determine and customize a methodology for collecting and storing their data. Some brokers will attempt to create a system from commonly known software. Others will prefer to work with leading-edge technology tools built specifically for that purpose. Later in this article, I'll offer some suggestions about where brokers can access powerful data capture and management tools. Regardless of the system or software selected, the key to extracting the value of performance stats is simple: disciplined use of the data. Once information is captured and managed in a secure environment, it should be referenced and revisited on a regular basis. No matter how the data is managed, the goal behind this strategy is to build and strengthen broker business. There are several ways information is used to grow business and maintain customers. Foremost, brokers can define their business cycles and know when the heaviest (and lightest) volume months are approaching and anticipate the loan characteristics that accompany each season (e.g., home equity booms following refinance waves, spring and summer bring in more business for first and second mortgages). This helps the broker create marketing pieces specific to certain seasons and months. Proactive business management can also help identify resource needs before a broker is drowning in volume, or avoid misallocated human resource costs. Comprehensive and centralized data that is easily located for review enables brokers to develop a strategy that has a positive impact on business. Lean on lenders for data systems Having made a commitment to monitor and capture performance stats, brokers must invest time in identifying a data management tool that supports their business model. Again, there are several solutions available, ranging from manual spreadsheets and filing systems (popular in the early and mid-20th century) to common off-the-shelf software packages. However, for the most sophisticated and streamlined tool, brokers should look to their lenders before attempting to create a system from the ground up. Their lender partners can provide tools that enable brokers to gather and manage data, and revisit past transactions and borrower history. Valuable lender partners have already taken this into consideration and implemented systems for brokers to not only manage their loan pipeline, but also track important data. Some lenders have invested in unique management systems for both their internal corporate loan officers and external partners (e.g., virtual loan officers and brokers). In the most advanced of these systems, every borrower's loan application is captured within a central database that tracks the borrower through to qualifying and underwriting. In ideal scenarios, a lender's system tracks the loan during the appraisal, processing and funding stages. Lenders that are committed to growing and deepening their broker partnerships will implement loan management systems with strong broker-facing interfaces. It is important to note that brokers need to use available resources (e.g., lenders' management systems) to build their database of performance stats. When this data is compiled, the overall information becomes actionable and maximizes broker ROI for every borrower (past, present and potential) and lending pattern. "Brokers up" Brokers have the opportunity to hit one out of the ballpark if they choose to monitor, manage and leverage their performance statistics. Borrower information is a strategic tool that can keep business booming despite industry fluctuation. Further, adopting a disciplined approach to mapping loan volume seasonally will enable brokers to predict business cycles and target markets ahead of the competition. This information has the potential to bring a broker out of the minor league business and into the major league mortgage field. William Alvaro is CEO of Melville, N.Y.-based Global Home Loans and Finance. He may be reached at (631) 393-0214 or e-mail [email protected].
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