Take the self-discipline out of mortgage pay-downsConnie Endersreintroduce biweekly payment programs, traditional, secure loan products, reduce mortgage debt It happened. The market is no longer an easy sell for mortgage brokers. The heat is on, and lending practices are returning to strict, traditional standards, shrinking the market of eligible borrowers. My guess is that we're at that moment that separates the men from the boys, or, in this case, the mortgage brokers from the used car salesmen. What will you do to attract new clients or reconnect with the old? Maybe you should step back and take a good, hard look at all you have to offer potential clients. Put yourself in their shoes and ask yourself if you would choose your services and products over the next guy's. Do you offer something that your competitor down the street doesn't? If not, it's time to kick in that creativity and think about ways you can set yourself apart from the rest. Perhaps it's time for a tried and true supplemental mortgage product that's been available in the United States for 25-plus years. As we are all aware, sales have slowed down a bit, due in part to defaults in the sub-prime market and general decline in real estate sales throughout the country. It's the perfect time to reintroduce biweekly payment programs, as people are looking for more traditional, secure loan products to reduce mortgage debt. Chances are good that if you've been in the business since the 1980s, you've got a pretty good understanding of biweekly payment programs. For those of you who aren't as familiar with the concept, I'll give you a brief overview. The biweekly payment option hit the United States from Canada in 1982. (That was perfect timing, as the prime rate was averaging 14 percent.) It went over big. After all, who wouldn't be attracted to a plan designed to pay off his mortgage debt faster and reduce the amount of interest paid on his home? The way this is accomplished is through combining the principle of compounding interest with advanced technology. Half of the regular monthly mortgage payment is debited on a biweekly basis from the client's bank account. However, the biweekly company pays the lender on a monthly basis, so due to the biweekly collection schedule, an extra half payment is collected about every six months and applied toward the outstanding balance (the equivalent of making one extra payment per year). This payment method successfully pays off the loan years in advance, saving thousands of dollars in interest charges for the client. See, it's very easy to understand how it works, but very difficult for the average person to do on his own. Let's face it: Not too many people have enough self-discipline to stick to an accelerated mortgage prepayment schedule on their own. Most of us have good intentions but not-so-great follow-through. It's like starting an exercise program without using a gym or personal trainer. You start out strong, but before you know it, you realize it's been months since that last sit up. So we either buy "fat clothes" and grab the remote or make the commitment to join a gym and hire that personal trainer. The beauty of an automated biweekly program lies in its automatic, painless savings. No amount of self-discipline (or sit ups) is required on the homeowner's part. Enrolling in an independent biweekly plan is your clients' financial gym and trainer rolled up in one. Think about how a biweekly loan product could help close your loan sale. Wouldn't you like to sit down with your client and show him how to save more than $70,000 on a $250,000, 30-year mortgage? (Also, he would be paying off the loan more than six years ahead of schedule!) No longer do you have a potential client; you've got a sale and a very satisfied customer--and I'm willing to bet plenty of referrals, as well! Something else to think about is that it doesn't matter how old the mortgage is. Using a biweekly payment program will always save time and money. Are you with me on this one? Talk about a great way to reconnect with former clients! Oh, and did I mention these programs work with virtually any loan product you offer? So how about it? What's in your tool belt? Do you offer your clients a biweekly program? If you don't, you might just want to look into it. Put those smiles back on your clients' faces, let them know you're on their side, and earn some additional revenue while you're at it. You have nothing to lose by offering a biweekly program and everything to gain. Don't you just love those win-win situations? Connie Enders is a marketing coordinator for Lancaster, Pa.-based Tower Administrative Services Inc. She may be reached at (800) 437-1670, ext. 242 or e-mail [email protected].