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What goes around comes around

National Mortgage Professional
Apr 15, 2008

It is rocket science!Joe Cornoreferrals, FHA, interest rates, Fannie Mae 1003 It tires me to see articles expressing how simplistic the mortgage business is. In fact, with the recent Federal Housing Administration changes and underwriting restrictions on various other programs, the matter becomes an education and study on how to do business all over again. This industry is always adjusting and changing, so it is important to stay ahead and on top of it. I do not believe in the standard rate alerts that notify your client base when rates take a turn. I do not believe in marketing on rates at any time. I never market on things that I do not have any control over. If someone out there has control over interest rates please e-mail me and explain how you do it. Many well-known published authors and trainers in our industry train principles that fail. When these individuals claim that your client base will remember you and refer you to others, they are delivering a false precept. The borrowing consumer, your client base, typically does not remember you or refer you. You need to be exceptional and atypical with your customers in soliciting referrals. I was once asked to take the Fannie Mae 1003 loan application and evaluate how many opportunities it empowers an originator to solicit additional business from the borrower. It took me a few days, but I came up with 63 opportunities to market for referral business while taking an application. I have a thorough breakdown of the application description and have written 29 pages to document the impact of completing an application correctly. It is a science to build the application and loan package up to becoming a cohesive map for the underwriter, showing customer compliance and qualification. I once received an e-mail from an originator. She stated that out of five applications and loan packages that were submitted to a lender, only one of them actually received approval and funding. She requested that I recommend lending sources that perform as they say they will. This request seemed interesting to me since, in reality, the lender is only responding to what was submitted to them. Moreover, they are responding to what was not submitted to them. Complete, accurate and legible applications and loan packages are critical in the industry today. They have always been important, but we previously had volume to compensate the mistakes and errors in poor applications and loan packaging. I am not belittling the originator in this scenario, nor am I claiming to be some master guru of authority. I am, however, suggesting that because only one out of five received approval and was funded, perhaps the originator should consider reviewing the application and packaging process. It is a science to become familiar with and package exactly what will lead an underwriter to accept and approve a loan. I, in turn, will do my part to help this originator by recommending lending sources and offering my assistance to help her and her company understand the loan application and packaging process. Both proud and pious personalities have written on credit scores and how to improve them easily. It is not easy to impact credit scores unless you know the system that each of your lending sources is using. Simply arguing and debating entries does not repair credit, nor can one argument be applied universally with regard to the credit scoring systems for each and every lender an originator may use. Any originator who has submitted the same loan file to multiple lenders can attest to this. Each lender probably had different scores and different credit issues with the loan because their particular system and matrix varied from the others. Lenders know and understand the improvement made by paying off a debt, or paying down a balance, and it is a 90-day short-term fix. It is yet another science project to become educated on long-term improvement on each scoring method that a certain lending source utilizes. This education can be limited to those lenders that you dedicate and commit to. Should we develop and send out newsletters on credit improvement and rate predictions? No! Wasn't there a well-known public speaker and trainer teaching about the non-existent housing bubble? Now, that same individual is traveling and teaching how to survive after the burst of that non-existent bubble. How would any professional, in any industry react to such presenters? It is a science to track and measure what the industry writers, presenters, trainers and gurus have been producing. Their newsletters make them income. I suggest that you do not pay for anything that you can look up for free. Be sure to monitor what various industry professionals have taught previously before you pay for misinformation today. When you have a timeline of ongoing successes, no matter what the market may be experiencing, then you have found a trainer who knows how to stay ahead of the trends. Some past mathematicians of the industry, entering logarithms on future values, neglected to equate being able to pay the mortgage when values decrease. I have saved each and every past article and training manual electronically so that I can send them out today. The concepts used to train in the past remain valid because they incorporate the current market. This article is for the market of the future and applies to those who will be in the industry in the future. After all, those who pay for poor advice and learn systems that fail will almost certainly not be around to learn, or pay for the true and correct principles. The word "easy" does not apply to the mortgage business. It is a difficult and traumatic industry to survive in. No pod cast, e-mail blitz or mailing campaign will gain you the control to master your business. It is rocket science that enables you to launch yourself into an environment where you have performed the research, understand the market needs, located resources that will satisfy the needs and penetrated a market share that will launch you into stratospheric revenue. This is not meant as a satire about poor trainers. It is meant to encourage you to dig in, do better, wake up earlier, serve better and make your own path. Yes, seek out true principles and tools that will assist you, but do not blame the presenters that taught you wrong principles. Come up with your own original thoughts. Joe Corno is president of Utah-based We Be Consulting and Seminars. He may be reached at (801) 836-2077 or e-mail at [email protected]
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