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Mission Accomplished: NAMB solves loan officer exemption issue
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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