The independent loan officer's three-step guide to big-dog marketing

The independent loan officer's three-step guide to big-dog marketing

August 24, 2005

Diversify your markets with vacancy payment relief loansBlair HansonRefinance loans, advice
I recently had the very good fortune of attending a presentation
by Fannie Mae's chief economist, David Berson. During Mr. Berson's
presentation, he made the startling prediction that the refinance
market would drop by more than 75 percent this year, followed by
another 40 percent drop in 2005! Considering the history of
remarkably accurate predictions coming from his department, I took
these words to heart. I hope you do, as well. But, most of us don't
need a brilliant economist to tell us something we can already see
reflected in our paychecks. The bottom line is that the
30-year-rate and term-rate reduction days are behind us, now.
However, the predictions are that there will still be almost $1
trillion in funded refinance loans in 2004. If these aren't the
traditional refis, what are they, and where can we go to find
I want to introduce you to a loan that I know, from personal
experience, sells in every rate environment, and has a list of
potential borrowers available to you, as close as your front
doorstep. I call it the "vacancy payment relief loan."
Over the course of your lifetime, can you remember when it would
have made a significant difference if you'd been able to send your
mortgage company or landlord a lower monthly payment or a reduced
amount of rent? Now, think about the situation that real estate
investors find themselves in on a regular basis. Who makes the
mortgage payment for them when the property is vacant and no rent
is coming in? Can't they just call their lender and explain that
since the house isn't rented out, right now, and no money is coming
in, that the investors will be sending them $500 less this month?
Won't the lender be understanding of their plight and be ready and
willing to help during his customers' time of need? The odds of
that are only slightly better than winning the lottery, and the
average person is seven times more likely to be struck by lightning
than to win the lottery. In other words, there's no chance.
Just a month or two of mortgage payments on a vacant property
can eat up a year or more of positive cash flow. And positive cash
flow is the single-most cited benefit of owning rental properties.
But, you can help. You can introduce the real estate investors in
your marketplace to a payment option ARM like the 12 MAT ARM
offered by IndyMac Bank and other lenders. These loans offer up to
three different payment options each month, including an option
that, in some cases, can be as little as half their current payment
and interest, tax and insurance payment. In addition, fully indexed
rates on these loans are as low as three or four percent. So, not
only will you be providing your clients with a way to maintain
positive cash flow during vacancy, in most cases, you'll actually
be reducing their rate, even if they've recently refinanced!
Finding leads for this particular marketing strategy is as easy
as picking up the local paper. All you have to do is ask yourself
this question: If your home was for rent, whose phone number would
you list in the "Homes for Rent" section? It'd be your phone
number, right? In short, you've just discovered a never-ending
source of leads. These leads are the direct phone numbers of real
estate investors whose rental properties are generating exactly
zero income. In most cases, you won't have to explain the benefits
twice. Experienced investors get it. They'll already be thinking
about how many new investment properties they can add to their
portfolio due to the increased cash flow.
After spending hundreds of hours on nights and weekends, calling
these leads, during my 15-year retail career, I did notice one very
nice profitable trend--on average, one out of every two people I
spoke to owned more than one rental property. More often than not,
I would get two or three loans from each borrower, rather than just
one. Often, that would include their primary residence, as
To sell your customers on vacancy payment relief loans, you'll
need to have a solid understanding of the product, how it works,
its advantages and its disadvantages. More importantly, you'll have
to explain the product to your customers in a way that they can
easily understand. What you can gain is access to a captive market,
a never-ending source of free leads, an opportunity to present a
bona fide solution to your customers and the distinct possibility
of several loans from a single source. Now, that's thinking outside
the box!
Blair Hanson is a national sales trainer with IndyMac Bank
and the author of "The Complete Step-by-Step Guide to Creating
Long-Term Real Estate Agent Relationships." He can be reached at
(202) 295-6371 or e-mail