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Mission Accomplished: NAMB solves loan officer exemption issue

Apr 06, 2006

The Mortgage Motivator: The perfect storm - how we got in it and how to get out of itRalph LoVuolo Sr., CMCmarketing, lead sources, creative solutions The mortgage industry is in the middle of a perfect storm right now. If you can't or won't navigate your way through it, you will drown. The past few years (the number being up for discussion and debate) have been a wonderful time - a rewarding series of profitable events, closings by the score - and we have all benefited from the needs of the customers who we have helped. What shouldn't be minimized are the fantastic benefits that the American public has received in terms that far outstrip any previous housing/monetary marketplace. Lower rates have led to increases in homeownership. Consumers have had the ability to spend freely and then experience consolidation of debt with seemingly no loss in buying power. Better and more liberal underwriting has allowed a public who would never have imagined being ensconced in their own home to forgo being relegated to the whims of some landlord. Wall Street has been more than cooperative by allowing us to create the many variations of financing that have powered the increase in price, value and equity all across this great nation. The option ARM, just to mention one type of product, has seen an unprecedented number of takers, creating homebuyers of those who could not and would not have previously bought real estate. Home sellers have asked for and been rewarded with increased prices, in most cases, far beyond belief. The economy has chugged along at a pace allowing rates to lower, then level off and become fairly stable. This has permitted a change in rates that was slow and even a bit predictable, which, as experienced prognosticators, we know is almost impossible. I have researched real estate values in many markets and it seems foolish to be quoting any here just so that someone else could play the game of "I can do better than that." Nevertheless, it is a fact that we have seen these unprecedented increases and unrealistic expectations being fulfilled. It has been just fantastic! Now, here we are caught in the middle of the storm - the one that is closing in on us from all sides as a tsunami of increased rates, lower values, inexperience and Wall Street's disinclination to be as free with their money as they were before - a perfect storm. Is there a way out of it? Are there any boats that can survive the onslaught? Are we all going to perish? Will we drown in our own successes? Navigating the storm won't be just a matter of understanding what to do; it is using every tool at your disposal to its fullest extent and then using it again. Be creative, be resourceful, be imaginative and be useful. What most of my clients over the past year have heard from me more than anything else is that they need to make their lives' work the focus of their everyday existence to give others what they need to make them happy, more successful, more rewarded, better understood and more financially secure. It wasn't clear to me until the past few years that we have an obligation to ourselves - if we give people what they want, we will always get what we want. The rub here is that most people cannot figure out what they want - and really don't try to give to others what they want. They first think of themselves and if, per chance, the others are able to benefit from their actions, then good for them. Case in point - a navigation tool Real estate agents are desirable people with whom to do business. You can argue with me all you want. You can tell me that they are selfish, have their hands in your pocket and only care about themselves, but my position is that you need them, just as you need attorneys, accountants, financial advisors, insurance brokers, title companies and builders. However, what you want is for them to give you business. My nephew recently went to real estate school to secure his real estate license. After he gratefully passed the test on his first try (a real accomplishment here in New Jersey), he was given a desk at a local real estate office that has offices in many states. During his first week at his desk, when he was still trying to find his way to the bathroom, he was accosted - yes, accosted - by no less than seven representatives of seven different mortgage companies. Here are their pitches: - If you have any buyer who you need to pre-qualify, be sure to call me. - If you have any deals, be sure to call me. - If you have anyone who you think might be looking for a mortgage, be sure to call me. I told my nephew to please call them back. Call them all back and ask every one of them if they had any ideas to help him develop his business. I told him that if they can help him develop his business, then he'll do business with them. Not one was able to come up with even one small idea to help my nephew through his first month - not one! A way to navigate out of the storm So, here is a way of not asking for business, but actually helping someone else to do business and then, per chance, if he does more business, then he will do business with you. To wit: real estate agents want to sell houses. You want to have relationships with real estate agents who sell houses. Find an apartment complex that has between 150-200 units. Be sure that the rent rolls are in line with the real estate market that you like to service (don't find a complex that has higher rents if you like to do FHA-type loans). Research the complex - find out how many are one bedrooms, two bedrooms, etc. - and what the rent rolls are. Then find out the addresses. Buy a list from a broker; it's cheaper than any other way. Now I ask you - if you were to never mail a piece of mail to that apartment complex for the rest of your life, what are your chances that you will do any business with the people in that complex? Nil? Nada? Very little? Okay, now what if, on the other hand, you send every one of the people in that complex something every month for the rest of your life that helps them live better, like reminding them that owning a home is better than renting, including the reasons why (tax benefits, security, independence, etc.)? Now go find a real estate agent who wants to grow his business. Of course, this will be hard to do. Ask the real estate agent if you can send out a mailer to those people in the apartment complex every month that includes the agent as a person to contact when they are thinking of pursuing the benefits of tax reduction. Will the real estate agent give you the referral on any leads that are generated from that complex? How do you think that the real estate agent is going to react? Here's an additional idea along these same lines. Find 10 apartment complexes, 10 different real estate agents, 10 accountants, attorneys, title companies, insurance brokers and financial advisors. Put it all together and you have a long-range plan for navigating the storm. Not quick enough? Not enough navigational expertise to get you out of the storm today? Okay, here's another one. Find a local savings and loan, credit union or small bank that does mortgages. On a percentage basis, especially with the recent changes in the secondary market in the sub-prime arena, they do not want to do those loans. They are not profitable. So ask for rejects. Make a friend. Stop in to see that person every week. Don't miss a stop. You drive by it anyway on your way to and from wherever you go, why don't you stop by and ask if you can help him look good to his boss? Remember, find out what he wants and give it to him. Want another one? Companies want to look good to their employees. Companies would find it difficult to find people who could offer their employees discounts for doing business with them. You want to develop relationships with attorneys, accountants, financial advisors, builders, insurance brokers and title companies. All of these people working together could be mutually beneficial to each other. "How?" you ask. Find five companies with about 100 employees. Stop in to see the president or human resources administrator of the company to see if he would be interested in providing a benefit to his employees at no cost to him - give him what he wants. See if he would like to see his employees get a discount for just learning about the benefits of homeownership, debt consolidation, insurance benefits or Social Security issues. Offer to put on a quarterly seminar, including whatever type of speaker he would find beneficial, and be sure there is a discount available. This is a rough sea, one that many will drown in. It takes skill to be able to navigate today - not skill in how to rebuild a car or diagnose a medical condition, but skill in marketing. Now, go find your way out of this storm. Ralph LoVuolo Sr., CMC is president of Mortgage Motivator, a mortgage industry training and coaching firm. He is a founder and past president of the New York Association of Mortgage Brokers, a teacher accredited by the New York and New Jersey Real Estate Commission, a former associate professor at Atlantic College and New York University and a published author. He can be reached at (609) 652-6901 or e-mail [email protected].
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